Keefe v The Queen
[2014] VSCA 201
•8 September 2014
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCR 2013 0082
| GREGORY WILLIAM KEEFE |
| Applicant |
| v |
| THE QUEEN |
| Respondent |
S APCR 2013 0125
| ROSS DAVID SIMPSON |
| Applicant |
| v |
| THE QUEEN |
| Respondent |
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| JUDGES: | REDLICH and WEINBERG JJA and SIFRIS AJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 24 March 2014 |
| DATE OF JUDGMENT: | 8 September 2014 |
| MEDIUM NEUTRAL CITATION: | [2014] VSCA 201 |
| JUDGMENT APPEALED FROM: | DPP (Cth) v Keefe; DPP (Cth) v Simpson [2012] VCC 1175 (Judge O’Neill) |
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CRIMINAL LAW – Conviction – Applications for leave to appeal – Inconsistent verdicts – Applicants convicted of two charges of conspiring to dishonestly cause a risk of loss to a Commonwealth entity (Australia Post) (Charges 1 and 2) – Applicants acquitted of two further charges (Charges 3 and 4) – Whether conviction on Charge 1 inconsistent with acquittal on Charge 3 – Verdicts reconcilable based on different facts in respect of Charges 1 and 3 – Differing verdicts not an affront to logic or common sense – Applications for leave to appeal refused.
CRIMINAL LAW – Sentence – Applications for leave to appeal – Total effective sentence of seven years and six months’ imprisonment – Whether total effective sentence and non-parole period manifestly excessive – Whether sentence disproportionate to that imposed on co-conspirator – Applications for leave to appeal refused.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicants | Mr C B Boyce with Ms S Leighfield | Anthony Isaacs |
| For the Respondent | Mr D J Lane with Mr A J Buckland | Commonwealth Director of Public Prosecutions |
REDLICH JA
WEINBERG JA
SIFRIS AJA:
Sifris AJA delivered the judgment of the Court.
On 14 August 2012 the applicants, Gregory William Keefe (‘Keefe’) and Ross David Simpson (‘Simpson’), were each convicted, following a trial in the County Court, of two charges of conspiring dishonestly to cause a risk of loss to a Commonwealth entity (Charges 1 and 2). The applicants were each acquitted of two further charges (Charges 3 and 4) of the same offence.
On 14 August 2012, following a plea on 30 and 31 July and 1 August 2012, identical sentences were imposed upon each applicant. Each applicant was sentenced to a total effective sentence of seven years and six months’ imprisonment with a non-parole period of five years.
The applicants seek leave to appeal against the conviction in relation to Charge 1, and leave to appeal against sentence generally.
Circumstances Surrounding the Offending
Keefe and Simpson were the sole directors of Mailing Advantage Pty Ltd (‘MA’), which provided mailing-house services to businesses and community organisations. They performed a ‘hands on’ role in running the business. Each was a former long-time employee of Australia Post (‘AP’) and had detailed knowledge of the mailing system.
Charge 1
Until February 2004, MA lodged all its bulk mail at Dandenong Letters Centre (‘DLC’), a major AP facility, via an AP truck which collected bulk mail from MA’s factory each day and took it to DLC for lodgement. From February 2004 until March 2008, although the free daily AP pickup continued, MA transported a substantial proportion of its bulk mail to Hughesdale Licensed Post Office (‘LPO’) for lodgement. Hughesdale LPO was a small suburban post office (‘PO’) within a pharmacy. The pharmacist, who was the licensee of the LPO, employed Brian Cornish (‘Cornish‘) on a salary as manager of the LPO.
The postal charges and conditions applicable to lodgement of various types of bulk mail were fixed by AP under the Australian Postal Corporation Act 1989 (Cth). Bulk mail lodged at a PO or AP facility was required to be accompanied by a mailing statement, and brought to account (that is, either paid for or charged to an AP account) at the time of lodgement. However, MA’s bulk mail lodged at Hughesdale LPO was never accompanied by a mailing statement, and most lodgements were not accompanied by any payment. Instead, MA provided Cornish with payment (usually by cheque payable to AP) about once per week, together with a post-it note which identified quantities and showed the calculation of the payment. The calculations substantially understated the number of mail articles lodged since the previous payment, and the postage payable. A covert audit by AP in November and December 2007 showed that MA lodged 215,566 articles at Hughesdale LPO over 19 working days, but provided payment for only 17,260. Over four years the total underpayment for mail lodged via Hughesdale LPO was in excess of $2.4 million.
At trial, the applicants gave evidence that they had begun to lodge mail via Hughesdale LPO following disputes over lodgements at DLC. They said that Cornish agreed to accept MA’s bulk mail for a ‘discount’ on the postage, and that he waived AP’s requirements for mailing statements and for the mail to be brought to account at the time of lodgement. Although Cornish had no power to do any of these things, the applicants said that they believed at the time that he did, and that they thought it was a legitimate commercial arrangement. While they admitted underpayment of the postage, they disputed the extent. They attributed the miscalculation of the number of articles lodged to honest mistakes and disorganisation, and claimed further that the audit period was not typical.
Charge 3
Charge 3 relates to a similar arrangement made with Paul Nigro (‘Nigro’), the co-licensee of another suburban PO, The Pines LPO. Between August and December 2007, the applicants arranged for the lodgement of bulk mail at The Pines LPO. The applicants were acquitted on Charge 3. However, the arrangement in relation to The Pines LPO is relevant to Ground 3 of this appeal, and is discussed further below.
Charges 2 and 4
Charge 2 relates to a scheme agreed upon by the applicants resulting in an understatement of its accounts and failure to report GST. The scheme resulted in the loss or risk of loss of GST and company tax of $544,161.50. Charge 4 related to the falsification of entries in MA’s accounts about its expenditure on postage.
The applicants were convicted on Charge 2 but acquitted on Charge 4. They do not appeal the conviction on Charge 2.
The Case Below
The Crown alleged that each applicant knowingly entered into an agreement in respect of each of Hughesdale LPO and The Pines LPO, that mail would be lodged without payment of all or any of the appropriate postal charges. Under the agreements, MA paid far less for that mail than what ought to have been paid pursuant to charges set by AP. The Crown’s case was that these arrangements were entered into with intent to underpay postal charges dishonestly.
Keefe and Simpson each claimed that their intention was to enter into an agreement in respect of both Hughesdale LPO and The Pines LPO for mail to be lodged pursuant to a legitimate commercial agreement reached with each of Cornish (Hughesdale LPO) and Nigro (The Pines LPO). They each believed that Cornish and Nigro had the capacity to enter into such an agreement. The applicants asserted further that the scheme was proposed and initiated by Cornish.
In related proceedings, Cornish pleaded guilty to fraud, and expressed willingness to testify against the applicants. He was not, however, called at the trial.[1]
[1]See DPP (Cth) v Cornish [2012] VSCA 45 (‘Cornish appeal’). In relation to Charge 1, Cornish was sentenced at first instance to two years and seven months’ imprisonment. The sentence on Charge 1 was left undisturbed by the Court of Appeal. Cornish was also charged with other unrelated offences (Charges 2–5). On appeal the sentences in relation to Charges 2–5 were increased by the Court of Appeal (see [80] below).
Nigro was separately tried and also pleaded guilty. He was sentenced on 10 November 2011. Nigro gave evidence for the Crown.
The Conviction Appeals
Ground 3: inconsistent verdicts
The sole ground of appeal relied upon[2] is that ‘the verdict of guilty on Charge 1 is unreasonable in that it is inconsistent with the verdict of not guilty on Charge 3’.
[2]The applicants abandoned Ground 1 prior to the hearing and Ground 2 during the hearing.
The applicants submitted that there was no logical or rational basis for the jury to acquit the applicants on Charge 3 and convict the applicants on Charge 1. Despite having contended otherwise at trial it was now said that the conduct and modus operandi of MA was the same in relation to both Hughesdale LPO (Charge 1) and The Pines LPO (Charge 3). The applicants emphasised that the respondent relied on coincidence reasoning in relation to both Charges. It is interesting and not without some relevance to note that written argument in relation to whether and to what extent there were differences between Hughesdale LPO and The Pines LPO extended to about fifty pages with each party taking the opposite position to that taken at trial. Although some of the points raised were frivolous, there was clearly a basis for rival positions to be put and argued. Resolution of the rival positions was quintessentially a matter for the jury.
The respondent contended that despite the similarities in modus operandi, there were significant differences between the evidence as it related to Charges 1 and 3 which afforded a logical and rational basis for the different verdicts on the two charges. These suggested differences are set out in summary below.
Location of the LPOs and duration of conspiracy
The respondent emphasised the frequency and duration of the lodgement of mail at Hughesdale LPO which was located much further from MA’s premises than The Pines LPO, compared to the short period during which MA lodged mail at The Pines LPO. This, it was contended, lent plausibility to the argument that lodgement at The Pines LPO was for legitimate commercial reasons.
The applicants contended that there were numerous POs that were closer than The Pines LPO, and in the case of both Hughesdale LPO and The Pines LPO, approaches were made by Cornish and Nigro to the applicants and bulk mail was accepted.
The respondent in a reply submission contended that the difference in the time taken to go to The Pines LPO and Hughesdale LPO was substantial. The Pines LPO was larger with more facilities and staff, and the existence of other POs in the vicinity was of no consequence. Further, it was submitted that on the evidence it was open to the jury to infer that Cornish was passive in his dealings with MA whereas Nigro had more actively solicited MA’s business.
In response, the applicants submitted that the distance between The Pines LPO and Hughesdale LPO was marginal and unlikely to have been of significance to the jury. Further, LPO facilities should have no bearing on the issue at trial which was essentially the applicants’ belief in Cornish’s and Nigro’s power to authorise accepting bulk mail and at a discounted rate.
Volume of mail and scale of underpayment
The respondent pointed to the total number of mail articles lodged at the Hughesdale LPO and the underpayment in respect thereof, which was far greater than the underpayment for mail lodged at The Pines LPO (even when MA was lodging mail at both locations).
The applicants contended that the shorter duration of lodgement at The Pines LPO needed to be considered in conjunction with the applicants’ admissions that a significant amount of mail was lodged at both sites without any payment, as well as the different types of mail items lodged at each location (items lodged at Hughesdale LPO were typically small letters, so more items could be lodged at one time). Further, the scale of underpayment was approximately equal between the two locations when calculated for the same time periods.
The applicants also contended that clients at both LPOs were invoiced at a similar relative rate above what the applicants paid for lodgement of mail, and it is the amount that was invoiced, and the disparity between the invoice amount and payments, that is important in establishing dishonest intent.
In reply, the respondent submitted that it was open to the jury to conclude that the character of the arrangement at each location differed. It was significant that the applicants had admitted knowingly lodging some items at Hughesdale LPO without payment. The jury was entitled to take the view that if mail lodged at Hughesdale LPO consisted of more parcels, then the implications were greater due to the consequent magnification of the underpayment.
In relation to the alleged admissions, the applicants contended that they were of no significance as a discount on the whole of the items lodged may be viewed as full payment on some items and no payment on others.
Delivery to The Pines LPO by junior employees
The respondent referred to the fact that the applicants personally delivered mail items to Hughesdale LPO, while deliveries to The Pines LPO were made by junior employees of MA.
The applicants contended that other MA staff delivered mail items to both Hughesdale LPO and The Pines LPO. They further submitted that they had not attempted to evade responsibility for errors made at The Pines LPO on the basis that they were committed by MA staff. Rather, Keefe’s evidence had been that ‘we’ (referring to Keefe and Simpson directly) had failed to accurately record the number of items delivered to both LPOs.
In reply, the respondent contended that in the early period of the conspiracy the applicants personally took all mail items to Hughesdale LPO and personal delivery by them made it more difficult for them to maintain that they thought they were paying for all the mail lodged at Hughesdale LPO. Further, it was argued that the gist of Keefe’s evidence was that two staff made almost all MA deliveries to The Pines LPO, and did not record the quantities of mail lodged as they had been told to do. The respondent submitted that Keefe’s use of ‘we’ sometimes referred to the applicants, and sometimes to the company, and that in this context, it clearly referred to MA.
Different relationships
The respondent argued that the relationships between the applicants and each of Cornish and Nigro was different. Cornish was known to Simpson, and the applicants had regular contact with Cornish as opposed to infrequent contact with Nigro who dealt mostly with an MA employee.
The applicants contended that there was no significant difference in the relationships between the applicants and Cornish and Nigro respectively at the time the arrangements were being made. There was no pre-existing relationship with either and there were preliminary discussions with each of them prior to the respective arrangements being reached.
The respondent submitted in reply that the frequent and repeated dealings between the applicants and Cornish over a long period of time were relevant in determining the nature of the agreement and state of mind of the applicants, in contrast to the few dealings which they had with Nigro over a shorter time.
In response, the applicants contended that authorisation and knowledge were the issues germane to the jury’s consideration rather than frequency of contact. The frequency of contact with Cornish had no bearing on the applicants’ belief as to Cornish’s authority, and the infrequency of contact with Nigro had no bearing on the lack of knowledge of any disparity between the volume of mail lodged at The Pines LPO and the amount invoiced to MA’s clients.
Status of Cornish and Nigro
The respondent also pointed to the difference in the status of Cornish and Nigro respectively. Cornish was an employee of the licensee of Hughesdale LPO whereas Nigro was co-licensee of The Pines LPO, and was introduced to the applicants as the owner of the LPO. Nigro also supplied the applicants with discounted AP stationary, a fact the applicants relied on to support the claim they believed Nigro had authority to offer a discount on AP services.
The applicants contended that it was Cornish’s position as the manager of Hughesdale that was important. The applicants’ knowledge that Cornish was not the licensee of Hughesdale had no impact on the understanding that Cornish had authority to negotiate an agreement.
The respondent in a reply submission contended that it was open to the jury to be satisfied that the applicants knew that Cornish lacked authority, even if not satisfied as to the degree of the applicants’ knowledge of Nigro’s lack of authority. Further, Cornish had no incentive to solicit business and received no subsequent benefit whereas Nigro, as a licensee, did.
In response, the applicants submitted that Cornish had dishonestly applied moneys received from MA pursuant to Charge 1 to his own ends and therefore did ultimately benefit from the arrangement.
Weighing, counting and calculating postage
A further difference relied upon by the respondent was in the processing (weighing, counting and calculating postage) of mail items at Hughesdale LPO and The Pines LPO, and by Cornish and Nigro respectively. MA’s bulk mail items were never properly processed at Hughesdale LPO and it was conceded by the applicants that Cornish accepted the mail and MA’s payment for it without dispute. In contrast, at The Pines LPO, on occasion, mail items were properly processed, including by Nigro, and there had allegedly been a complaint by Nigro about the quantity of mail.
The applicants contended that as Cornish did not give evidence, there was more evidence available on Nigro’s practice than on Cornish’s, and that Cornish did on occasion count tubs of mail. The applicants pointed to the same practices at The Pines LPO and Hughesdale LPO, including the failure to question the quantities of mail at both sites.
The respondent contended that the applicants were aware that neither Cornish nor other staff at Hughesdale LPO kept records of mail items lodged and postage payable. Cornish issued receipts based on the applicants’ calculations without query, whereas there was some assessment of postage payable at The Pines LPO. The evidence regarding the provision of post-it notes with payment at Hughesdale LPO had more force than the evidence of the same practice at The Pines LPO. Further, there was no evidence of the applicants personally loading mail into an AP van at The Pines LPO.
In reply, the applicants submitted that it was the applicants’ knowledge of who counted tubs and trays (and if they were counted at all) which is relevant. The applicants’ evidence was that they did not know whether Nigro counted, and that Cornish either counted himself or relied on MA to do so. The applicants argued that if dishonesty is predicated on knowledge, this lent more weight to the case for dishonesty in relation to The Pines LPO than to Hughesdale LPO. Regarding the loading of mail in an AP van, the applicants submitted that the use of the handwritten note system to record mail lodged renders these submissions irrelevant.
Handwritten notes
The respondent referred to the applicants’ handwritten notes which accompanied the payments to Cornish and receipts from Cornish in return. The respondent submitted that evidence of these notes from Hughesdale LPO demonstrated that the applicants (and not Cornish) determined the quantum of payment at Hughesdale, contradicted the applicants’ claim about the arrangement with Cornish and, in conjunction with other evidence, that the failure to make any payment for some mail items was not due to an innocent mistake. It was argued that Charge 1 was supported by the number and nature of the handwritten notes at Hughesdale LPO and the correlation between the notes and invoices over a long duration, as well as the unsatisfactory and conflicting evidence from the applicants about the notes. No handwritten notes from The Pines LPO were in evidence. The small number of receipts from The Pines LPO did not show the pattern of false calculation evidenced in the Hughesdale LPO notes, and some showed a range of legitimate AP rates for various classes of bulk mail.
The applicants contended that the evidence established that a handwritten note system was employed at both sites and that the only substantial difference between the systems at each site was the rate for the calculation of postage. It was submitted that the differing rates were explained by the different types of mail articles being lodged and the fact that the process of calculation became more streamlined at Hughesdale LPO. Further, the applicants argued that distinction between the sites based on the differing rates would be incongruous as the respondent had rested its case on the dishonest agreement being based on mail being processed without payment rather than at a reduced rate.
The applicants argued that in view of all this, there was no logical or rational basis for the impugned verdicts simply on the basis that in the instance of Hughesdale LPO certain documentation had been kept, whereas at The Pines LPO it had been destroyed. The applicants had admitted that the same system of post-it notes operated in the case of each LPO, and this was relied on as coincidence evidence in proof of both Charges 1 and 3. By dint of the massive underpayment at The Pines LPO, it was inevitable that the handwritten notes employed at The Pines LPO were of a nature similar to those used at Hughesdale LPO.
Cessation of deliveries
The applicants continued to lodge bulk mail items at Hughesdale LPO after they ceased lodgment at The Pines LPO in December 2007, having been informed that such lodgment was inappropriate. The respondent contended that the jury was entitled to distinguish between Charges 1 and 3 on the basis that the communications from AP applied equally to both sites, and yet deliveries to Hughesdale LPO only ceased when the applicants believed they were under investigation. Further, evidence of a conversation between the applicants in relation to the eventual cessation of deliveries to Hughesdale LPO in March 2008, was highly incriminating in relation to Charge 1, but not Charge 3.
The applicants contended that the ultimate cessation of delivery to The Pines LPO occurred due to two factors; communications from AP to MA and driver complaints about the quantity of mail items. The applicants submitted that according to Nigro’s evidence, lodgements at The Pines LPO stopped after he had complained that they were too large, and they noted that the lodgements at Hughesdale LPO were of a smaller size, tending to be mostly of small letters.
In relation to the incriminating conversation, the applicants noted the trial judge’s direction to the jury that the implied admission contained in the conversation was admissible on both Charges 1 and 3 and submitted that it therefore does not provide a basis for rationalising the inconsistent verdicts.
The applicants submitted further that the length of the agreement in respect of The Pines LPO was irrelevant if the jury had found the applicants guilty of Charge 1 on the basis that the Hughesdale LPO conspiracy commenced prior to The Pines LPO agreement, as the applicants must have already known that lodging mail at rates lower than that stipulated by AP was dishonest. The applicants contended that the period during which an error in the recording of the volume of articles taken to the LPOs occurred was during an audit period that coincided with the duration of both Charges 1 and 3.
Coffee shop agreement – Nigro’s evidence
The trial judge gave an unreliable witness warning in relation to Nigro’s evidence. The respondent submitted that this may have influenced the jury’s decision to acquit on Charge 3 but would have little to no bearing on Charge 1.
The applicants contended that, while Nigro’s evidence may have been rejected, the applicants had admitted that similar agreements existed at both Hughesdale LPO and The Pines LPO. The applicants also admitted that underpayment at both locations went beyond the terms of the respective arrangements (which had started with a moderate reduction in the volume of postage being paid for) which the applicants had perceived to be a legitimate commercial discount.
The respondent contended that the evidence of the applicants’ initial arrangement with Cornish differed significantly from their evidence about the initial arrangement with Nigro. The applicants admitted that initially the Hughesdale LPO agreement involved a portion of MA’s mail being lodged without payment, which they knew was a dishonest arrangement. The evidence about the arrangement with Nigro was more equivocal, and as such it was open to the jury to treat the admissions about the initial arrangement with Cornish as highly probative, without necessarily giving the same consideration to the evidence about the initial arrangements with Nigro.
Consideration
There was no dispute as to the applicable legal principles.
In MacKenzie v The Queen,[3] the plurality judgment set out six general propositions in relation to inconsistent verdicts. They are –
[3](1996) 190 CLR 348 (‘MacKenzie’).
From a review of the cases, a number of general propositions can be stated:
1.A distinction must be drawn between cases of legal or technical inconsistency and cases of suggested factual inconsistency. The former will generally be easier to resolve. ...
2.Suggestions of factual inconsistency have arisen both as between different verdicts affecting the same accused and different verdicts affecting co-accused or persons tried separately in relation to connected events. ...
3.Where, as is ordinarily the case, the inconsistency arises in the jury verdicts upon different counts of the originating process in a criminal trial, the test is one of logic and reasonableness ...
4.Nevertheless, the respect for the function which the law assigns to juries (and the general satisfaction with their performance) have led courts to express repeatedly, in the context both of criminal and civil trials, reluctance to accept a submission that verdicts are inconsistent in the relevant sense. Thus, if there is a proper way by which the appellate court may reconcile the verdicts, allowing it to conclude that the jury performed their functions as required, that conclusion will generally be accepted. If there is some evidence to support the verdict said to be inconsistent, it is not the role of the appellate court, upon this ground, to substitute its opinion of the facts for one which was open to the jury. In a criminal appeal, the view may be taken that the jury simply followed the judge’s instruction to consider separately the case presented by the prosecution in respect of each count and to apply to each count the requirement that all of the ingredients must be proved beyond reasonable doubt. Alternatively, the appellate court may conclude that the jury took a ‘merciful’ view of the facts upon one count: a function which has always been open to, and often exercised by, juries. ...
5.Nevertheless, a residue of cases will remain where the different verdicts returned by the jury represent, on the public record, an affront to logic and common sense which is unacceptable and strongly suggests a compromise of the performance of the jury’s duty. More commonly, it may suggest confusion in the minds of the jury or a misunderstanding of their function, uncertainty about the legal differentiation between the offences or lack of clarity in the judicial instruction on the applicable law. It is only where the inconsistency rises to the point that the appellate court considers that intervention is necessarily required to prevent a possible injustice that the relevant conviction will be set aside. It is impossible to state hard and fast rules. ‘It all depends upon the facts of the case’.
6.The obligation to establish inconsistency of verdicts rests upon the person making the submission … .[4]
[4]Ibid 366–368 (citations omitted.)
In Goldsmith v The Queen,[5] this Court said as follows:
A court should ordinarily be loath to find that members of a jury have willingly foresworn their oaths and arrived at their verdict on the basis of compromise, rather than the evidence led at trial. There may be occasions when that is the only conclusion that can be reached. However, this is not one of them.[6]
[5][2010] VSCA 99 (‘Goldsmith’).
[6]Ibid [51] (Weinberg, Mandie and Bongiorno JJA) (citations omitted).
In Amato v The Queen,[7] Maxwell P referred to MacKenzie[8] and Goldsmith[9] and said:
Complaints of inconsistent verdicts are advanced in this Court with some frequency, particularly in cases of sexual offences. The complaint rarely succeeds. This is hardly surprising, in my view, given that success on the inconsistency ground involves persuading the appellate court that no logical or rational basis can be found for reconciling the verdicts in question. Put another way, it must be shown that no reasonable jury, applying their minds properly to the facts of a case, could have arrived at those (differential) verdicts.
As counsel for the applicant acknowledged, appellate courts have consistently expressed reluctance to come to such a conclusion. As the High Court explained in MacKenzie v The Queen, that reluctance reflects both ‘respect for the function which the law assigns to juries (and the general satisfaction with their performance)’. Experience shows that juries take their role very seriously, discharge their duty conscientiously, and — relevantly — follow directions to consider each count separately. …
As a result, if there is some evidence sufficient to sustain the difference in verdicts, the Court is not inclined to substitute its own view for that of the jury. …[10]
[7][2013] VSCA 346.
[8](1996) 190 CLR 348.
[9][2010] VSCA 99.
[10]Ibid [3]–[5] (citations omitted). See also King v The Queen [2014] VSCA 107 [29]–[35] (Weinberg JA).
In our opinion, the applicants have failed to establish that the verdicts are inconsistent. A consideration of the evidence and in particular the matters that have been identified and referred to, compel a conclusion that there was more than a sufficient basis for the jury to be satisfied beyond reasonable doubt that Charge 1 had been proved and at the same time fail to be satisfied, to the same standard, that Charge 3 had been proved.
Although there were specific factors — some more important than others — that distinguished the conduct underpinning Charge 1 from Charge 3, it should be emphasised, as a more general matter, that the circumstances relating to The Pines LPO involved different parties and witnesses, a different conspiracy and different evidence and circumstances to that of Hughesdale LPO. More particularly, a conviction required inferences to be drawn from circumstantial evidence which differed in nature, extent and quality between Hughesdale LPO and The Pines LPO. In these circumstances it is extremely difficult to make out a case that there was no rational or logical basis for the different verdicts. The basis for differentiation gains more traction where, as in this case, there is a reasonably large and long trial (30 days) with numerous witnesses and substantial evidence, some of which was directed exclusively (although there was a large overlap) to the particular charge, that is, Charge 1 or Charge 3.
Without being exhaustive, there are a number of critical matters that provide a rational and logical basis for the different position taken by the jury in relation to Charge 3.
First, having been instructed to keep Charges 1 and 3 separate and to consider the evidence separately, there was compelling evidence in relation to Charge 1 that was absent (or not as compelling) in relation to Charge 3. In relation to Charge 1 the handwritten notes were tendered. They provided strong evidence of the conspiracy in relation to Hughesdale LPO. They established that the amounts to be paid in respect of Hughesdale LPO were determined by the applicants. This impacted on their defence of innocent mistake. Further, during a telephone intercept of a conversation between the applicants on 26 March 2008, and in relation to Hughesdale LPO, certain statements in the nature of admissions were made. No handwritten notes were produced or tendered in relation to The Pines LPO. The evidence of their use and existence (whilst of some relevance) does not compare with the evidence of the actual notes themselves. There was no telephone conversation in evidence specifically in relation to The Pines LPO. The quality of the evidence in relation to Hughesdale LPO in these respects is sufficient to provide a rational and logical explanation for the position taken by the jury. But there is more.
Secondly, the applicants, over a very lengthy period and almost daily, took most of the mail to Hughesdale LPO, particularly at the beginning of the period. The evidence in this regard was substantial, overwhelming and uncontradicted. It also undermined the applicants’ defence of innocent mistake. The same cannot be said of The Pines LPO which was for a much shorter period and was substantially left to junior staff. The exceptions referred to were insubstantial and not destructive of the point, which the jury was entitled to consider. These are matters of substance, particularly the duration point, and provided a further rational and logical explanation for the position taken by the jury with respect to Charges 1 and 3.
Thirdly, the jury was entitled to consider the different positions occupied by Cornish and Nigro and the different relationships between the applicants and each of Cornish (Hughesdale LPO) and Nigro (The Pines LPO), and in particular their respective agreements (in substance and duration) said to form the basis of the conspiracy. So far as The Pines LPO is concerned the jury did not accept the evidence of Nigro. Cornish did not give evidence. This approach, open to the jury, provides a rational and entirely logical approach to the different verdicts. The rejection of Nigro’s evidence, together with the other facts referred to, called into question and raised doubt as to, the conspiracy in relation to The Pines LPO. The extent, degree and quality of evidence in relation to The Pines LPO, informed by an unreliable witness, were matters for the jury and they decided accordingly as they were entitled and indeed obliged to do.
It is neither necessary nor desirable to go further. The evidence should not be considered piecemeal.[11] The Court should not, as it were, engage in a microscopic, comprehensive and retrospective analysis and dissection of the evidence particularly in cases of this kind where there is substantial evidence of a circumstantial nature. Detail, demeanour and nuances are at play that may escape a clinical analysis of the similarities and distinctions that emerge from the substantial evidence. In this regard all of the other matters referred to, perhaps not individually, but collectively feed into the analysis and confirm that it was indeed open to the jury to consider that there was a rational and logical basis to their decision. The Pines LPO was so different in extent, duration and scope that it is almost self-evident that there were differences and distinctions, particularly having regard to the evidence, namely the higher quality of evidence in relation to the Hughesdale LPO.
[11]R v Hillier (2007) 228 CLR 618, 637 [46] (Gummow, Hayne and Crennan JJ).
The different verdicts are not an affront to logic and common sense. We would refuse leave to appeal.
The Sentence Appeals
Ground 1(a) was not pressed and Ground 1(b) was abandoned prior to the commencement of the appeal. There are four remaining grounds of appeal in relation to sentence.
Ground 2: The judge erred in sentencing on the basis that the offending in Charge 1 spanned the period February 2004 to March 2008 when the applicant was acquitted of Charge 3, which spanned the period August to December 2007.
Ground 3: The sentence on Charge 1, the total effective sentence and the non-parole period are manifestly excessive.
Ground 4: The sentence on Charge 1 is manifestly and unjustifiably disparate when regard is had to the sentences imposed on Mr Cornish for the equivalent charge.
Ground 5: The Sentencing Judge erred in finding that: (a) the applicants initiated the scheme at Hughesdale LPO; (b) the culpability of the applicants was ‘far greater’ than that of Mr Cornish; and (c) the initiation of the agreement by the applicants was an aggravating factor in circumstances where it could not be found beyond reasonable doubt that the criminality attaching to the offence coincided with the commencement of the arrangement at Hughesdale LPO.
Ground 2
It is difficult to follow the ground. It was not an argument advanced below. It attempts to reconcile the verdicts in relation to Charge 1 (Hughesdale LPO – guilty) and Charge 3 (The Pines LPO – not guilty) and postulates a situation where the relevant intention and agreement comprising the conspiracy in relation to Hughesdale could only arise after December 2007, when the conduct ceased in relation to The Pines LPO. It was only at this stage when such conduct ceased, because of knowledge of illegality, that the remaining period of the conduct in relation to Hughesdale LPO was rendered unlawful. This is a much shorter period than the four year period, the subject of Charge 1.
We do not accept the submission. It is against the substantial and overwhelming evidence that pre-dates the operation at The Pines PLO. It was entirely open to the jury to conclude that the conduct during this (prior) period evinced and evidenced the necessary intention that formed the basis of the conspiracy and that the intrusion of The Pines LPO, very late, and cessation at The Pines LPO made not a jot of difference. Further, the submission appears to be based on the assumption that there was no distinction in the operation of Hughesdale LPO and The Pines LPO – a proposition that goes against the substantial evidence and has been rejected.
Ground 3
The applicants submitted that the head sentence of six and a half years in respect of Charge 1 was excessive having regard to the maximum penalty (10 years’ imprisonment), the absence of prior convictions and the presence of, in the case of each applicant, good character and various factors in mitigation.
The respondent submitted that the sentence imposed was within the range of sentences available to the sentencing judge in all the circumstances.
In R v Abbott[12] the Court said:
… The ground of manifest excess will only succeed where it can be shown that the sentence was ‘wholly outside the range of sentencing options available’ to the sentencing judge.[13]
[12](2007) 170 A Crim R 306.
[13]Ibid 309.
In Nguyen v The Queen,[14] the Court said:
As has frequently been stated, the ground of manifest excess is difficult to establish. An applicant must show that the sentence fell outside the range of sentences that could be imposed in the reasonable exercise of the sentencing discretion. The excess must be manifest in the sense that it is plain, clear, obvious, apparent or unmistakeable.[15]
[14][2014] VSCA 53.
[15]Ibid [20] (citation omitted).
The ground is without substance. Neither the total effective sentence (seven and a half years), the sentence in relation to Charge 1 (six and a half years) or the non-parole period (five years) are manifestly excessive. They are well within the range that was available to the sentencing judge.
The offences were very serious. As the trial judge found, both offences ‘involved careful planning, significant deception and concealment, and the loss to the public of a very large amount of money’. [16] The offences were at the high end of Commonwealth frauds. His Honour assessed the loss to AP from the Hughesdale conspiracy at $2,494,000[17] and the revenue at risk of loss from the tax conspiracy at $544,000.[18]
[16]DPP (Cth) v Keefe; DPP (Cth) v Simpson [2012] VCC 1175 [12].
[17]Ibid [23].
[18]Ibid [24].
In relation to Charge 1, his Honour found that the applicants were ’the principal instigators of the scheme’ and that they ’saw the opportunity to utilise Cornish and [Hughesdale LPO] so as to enable MA’s mail to be processed without anything other than modest payment’.[19] His Honour also found that the applicants were ’responsible not only for the instigation of the [Hughesdale LPO] arrangement, but its implementation and regulation over a very considerable period of time’.[20] Carrying out the scheme involved many individual acts of dishonesty, such as the provision of notes which purported to calculate the number of postal articles lodged and the postage payable ’which were comprehensively and deliberately inaccurate’.[21] His Honour also found that the arrangement came to an end only when the applicants became suspicious that they were under investigation by AP.[22]
[19]Ibid [4].
[20]Ibid [5].
[21]Ibid [4].
[22]Ibid [5].
In relation to Charge 2, the applicants conceived of the scheme for use of ‘off-line’ invoices in early 2004 and continued to exploit it for more than four years, during which time the accounts of the company always understated its income and sales. As his Honour found, ’[a]spects of the scheme were sophisticated, in particular, the redirection of cheques and the alteration of bank deposit entries’.[23] The scheme resulted in the lodgement of 17 successive Business Activity Statements (‘BAS’) returns that each understated the GST collected by MA during the relevant quarter, and four successive annual tax returns that each understated the income of the company during the relevant financial year, and would have led to a fifth such annual return had events taken their course. The applicants have not contended that the sentence imposed for that offence (two years and six months’ imprisonment) was manifestly excessive.
[23]Ibid [56].
While, as in most white-collar fraud cases, the applicants were of previous good character and had good prospects of rehabilitation, and his Honour had regard to delay,[24] there were few other significant mitigating factors. His Honour treated the applicants’ heavy gambling in 2007 and 2008, not as an excuse but as an explanation for the offending.[25]
[24]Ibid [52].
[25]Ibid [28], [53].
Appellate courts have repeatedly emphasised that serious fraud on the Commonwealth and its agencies requires the imposition of sentences that give real effect to principles of general deterrence and denunciation.[26] Amongst the reasons for this approach are that:
(a) such offending has many harmful, but often hidden, social consequences;
(b)revenue systems often rely on honesty;
(c)the cost of fraud is borne by the whole community;
(d)fraud is difficult to detect, and if undetected the rewards may be great;
(e)the investigation and prosecution of fraud consumes considerable public resources; and
(f)general deterrence is likely to have a more profound effect in the case of white-collar criminals.
[26]The principles, and relevant authorities, are conveniently collected in three recent decisions: DPP (Cth) v Gregory (2011) 34 VR 1 [51]–[57], [66]; R v Huston; ex parte DPP (Cth) [2011] QCA 350; 219 A Crim R 209, 213-215, 217 [10]–[21], [33]; R v Boughen [2012] NSWCCA 17; 215 A Crim R 476, 486-495 [59]–[91], [96]–[98].
The sentence is within range and is not manifestly excessive. The ground is not made out.
Ground 4
In the end Cornish received a total effective sentence of three years and six months’ imprisonment. The sentence on Charge 1 of two years and seven months’ imprisonment was not disturbed on appeal. The sentences on Charges 2–5 were increased to between three and six months’ imprisonment with a total of eleven months’ cumulation. A non-parole period of two years and four months was fixed.
The applicants submitted that they have a legitimate grievance in that they received a sentence of six years and six months’ imprisonment and for the same offence Cornish received significantly less, that is two years and seven months.
We reject the submission. For reasons that follow, the disparity in sentencing was entirely justified and followed very careful consideration by the sentencing judge in relation to the question of parity with Cornish’s sentence. There is no error in the reasoning of the trial judge.
There were substantial differences in the relevant circumstances. First, the objective seriousness of the applicants’ offending was much greater than that of Cornish’s offending. Cornish was sentenced at first instance, and re-sentenced by this Court, on the basis that he was ‘initiated into the fraud by those who conceived it and who profited by it, while (save as to a trifling extent) he did not’.[27] While Cornish was acting in breach of trust, his part in the conspiracy was largely passive. This Court agreed with the sentencing judge that Cornish ‘accepted what Simpson and Keefe ‘gave him by way of inadequate documentation and did not question it’.[28] In sentencing the applicants, his Honour made similar factual findings. His Honour found[29] that the applicants were ’the principal instigators’ of the scheme and rejected their evidence that it was Cornish who proposed the scheme. His Honour also rejected a submission that the offending of the applicants was opportunistic.[30] His Honour found that they ‘were responsible not only for the instigation of the arrangement, but its implementation and regulation over a very considerable period of time’.[31] In comparing their offending with Cornish’s, his Honour observed that the applicants ’initiated the scheme, implemented and administered it, and significantly realised a far greater profit. In fact, Cornish, apart from the misappropriated cheques, received little, if any, profit’.[32]
[27]‘Cornish appeal’ [2012] VSCA 45 [54]. The Court also said (at [41]) that benefits Cornish received were ‘of trifling value’. The benefits that the Court was referring to did not include Cornish’s misappropriation of 57 cheques with a total value of $124,555.52 that were given to him by MA; that was the subject of separate charges. The sentencing judge did not treat the opportunity for this misappropriation as a benefit accruing to Cornish from his participation in the conspiracy, and this Court (at [41]) rejected the DPP’s submission that her Honour ought to have done so.
[28]Ibid [36] where the Court also said that Cornish ‘did not ask questions of [Simpson and Keefe] because he already knew the answers. His moral culpability arises because, knowing the answers, he failed to act honestly in response’.
[29]DPP (Cth) v Keefe; DPP (Cth) v Simpson [2012] VCC 1175 [4].
[30]Ibid [56].
[31]Ibid [5].
[32]Ibid [46].
Second, there were substantial mitigating factors in Cornish’s case which did not apply to the applicants. Cornish entered an early plea of guilty — not ‘latish’ as the applicants assert, but at the commencement of the committal hearing — and thereby did what he could to save the community the expense of a long trial. Both at first instance and on appeal it was accepted that Cornish showed remorse, evinced by his willingness to cooperate in the investigation and prosecution (although he was unable to do so).[33] The substantial weight given to those factors was evident from the s 6AAA declaration[34] made by this Court in Cornish’s case: but for the plea, the total effective sentence (‘TES’) imposed on Cornish would have been seven years with a non-parole period (‘NPP’) of four years and three months, rather than the actual TES of three years and six months with a NPP of two years and four months.[35] There were other mitigating factors in Cornish’s case which did not apply to the applicants. While the Court concluded that Cornish’s personality disorder did not ‘much diminish his moral culpability’,[36] in re-sentencing him it accepted that ‘what would otherwise be a yet sterner punishment should be ameliorated, albeit to an extent less than her Honour allowed, to account for the special characteristics of the respondent’s personality’ which ‘open the door to considerations of mercy’.[37] Those considerations would have applied regardless of Cornish’s plea.
Ground 5
[33]Cornish appeal [2012] VSCA 45 [52].
[34]Sentencing Act 1991 s 6AAA.
[35]Cornish appeal [2012] VSCA 45 [56]. In accordance with the usual practice, the declaration was confined to the total effective sentence. It included the sentences for the misappropriation of the cheques.
[36]Ibid [47].
[37]Ibid [55]. The Court observed that ‘those considerations are adequately reflected in the relatively short non-parole period which we propose’.
The applicants were permitted to seek leave to add this additional ground of appeal. Both the applicant and the respondent have filed written submissions. The respondent opposes the application.
In our opinion leave should be refused substantially for the reasons advanced by the respondent.
The applicants have had ample opportunity to formulate their grounds of appeal. The present application for leave to add a further ground follows the hearing of the appeal and the applicants’ original applications for leave to appeal which was lodged many months out of time (more than eight months out of time in Keefe’s case and almost ten months in Simpson’s case).
The arguments now sought to be advanced by the applicants substantially repeat those advanced on their behalf at the plea hearing and rejected by the sentencing judge. There is no reason why the proposed ground could not have been raised in the applicants’ original applications for leave to appeal against sentence.
The discretion to grant leave to add an additional ground of appeal in these circumstances is exceptional. Applicants are required to comply with the statutory time limits and the requirements of the Rules and Practice Directions.[38] Although exceptional circumstances might arise, for example, where the proposed ground is raised by some new development, or where the merits of the ground are so strong that the interests of justice require that leave be granted, no such exceptional circumstances exist here. There has been no new development and the proposed ground is without substance.
[38]Compare R v Davis (2003) 6 VR 538 [5]–[6]; Hoy v The Queen [2012] VSCA 49 [6].
Early in the plea hearing, the sentencing judge observed:
I mean my view at this stage, I must say, is that it seems to me from the evidence that I’ve heard that Mr Keefe and Mr Simpson – their offending was more significant, if I could put it that way, because they really seem to me to be the initiators and the implementers of the scheme. More so than Mr Cornish. I mean they were delivering the mail there day after day, often personally or their employees at their direction. They seem to really be in the driver’s seat of this whole business.[39]
His Honour adhered to this view and developed it in his reasons for sentence.[40]
[39]Transcripts of Proceedings, DPP (Cth) v Keefe; DPP (Cth) v Simpson (County Court of Victoria, CR-11-00315; CR-11-00314, Judge O’Neill, 30–31 July and 1 August 2012) 32.
[40]DPP (Cth) v Keefe; DPP (Cth) v Simpson [2012] VCC 1175 [1]–[7], [46], [56].
In relation to proposed Grounds 5(a) and (b), having seen and heard all the evidence, including the lengthy (and unsatisfactory) evidence of the applicants (and their demeanour in the witness box), his Honour was well placed to make the findings which the applicants now seek to impugn. Contrary to the contention of the applicants, and as submitted by the respondent, there was abundant evidence to support those findings (only some of which is referred to in his Honour’s reasons for sentence); it included a large body of evidence about such matters as the applicants’ and Cornish’s conduct, and their relationships with one another, over the whole period of more than four years. It was also the basis on which the Court of Appeal proceeded in the Cornish appeal.[41] Accordingly, it was open to the sentencing judge to make those findings.
[41]Cornish appeal [2012] VSCA 45 [36].
The proposed Ground 5(c) has no merit. The ground was dealt with under Ground 2 in relation to sentence. The suggested factual basis that underpins Ground 2 and the proposed Ground 5(c) is wrong and is against the substantial contrary evidence in the case.
We would refuse the applicants leave to appeal against sentence.
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