R v Brady

[2024] NSWDC 223

District Court

New South Wales

Medium Neutral Citation:

R v BRADY [2024] NSWDC 223

Hearing dates:

4 April 2024, 7 June 2024

Date of orders:

18 June 2024

Decision date:

18 June 2024

Jurisdiction:

Criminal

Before:

Lerve DCJ

Decision:

Sentenced – see paragraphs [1] – [1]

Catchwords:

SENTENCE – Commonwealth offending – GST fraud – general deterrence – ICO consideration.

Legislation Cited:

Crimes Act 1914

Crimes (Sentencing Procedure) Act 1999

Crimes (Sentencing Procedure) Amendment (Sentencing Options) Bill 2017

Criminal Code 1995 (Cth)

Cases Cited:

Acosta v R [2015] VSCA 94

Chan v R [2023] NSWCCA 206

DG (No. 1) v R [2023] NSWCCA 320

DPP (Cth) v Beattie (2017) 270 A Crim R 556

DPP (Cth) v De La Rosa (2010) 79 NSWLR 1

Hili& Jones v The Queen (2010) 204 A Crim R 434

Khanat v R (Cth) [2024] NSWCCA 41

Rasel v R [2022] NSWCCA 239

Sabra v R [2015] NSWCCA 38

Stanley v DPP [2023] HCA 3

The Attorney General’s Application Under s 37 of the Crimes (Sentencing Procedure) Act, 1999 No. 1 of 2002 (2002) 56 NSWLR 146

Tonga, Samuel [2023] NSWCCA 120

Zheng v R [2023] NSWCCA 64

Category:

Sentence

Parties:

Rex
Luke James BRADY

Representation:

Counsel:
Ms E Gordon for the Crown
Mr P Swaine, for the Offender

Solicitors:
Commonwealth Office of the Director of Public Prosecutions
Rod Kennedy Solicitors

File Number(s):

2022/365325

Publication restriction:

No

REMARKS ON SENTENCE

1. The offender appeared before a Magistrate at the Wagga Wagga Local Court on 27 September 2023 and pleaded guilty to two charges namely that he:

Sequence 1: Between about 7 April 2022 and 14 April 2022 at Junee or elsewhere in New South Wales (he) by deception dishonestly obtained a financial advantage, namely $15,724.00 from a Commonwealth entity, contrary to s 134.2(1) of the Criminal Code 1995 (Cth), and further

Sequence 3: On or about 29 April 2022 at Junee or elsewhere in New South Wales, (he) by deception attempted to dishonestly obtain a financial advantage namely $29,801.00 from a Commonwealth entity, contrary to s 134.2(1) and 11.1(1) of the Criminal Code 1995 (Cth).

2. The pleas of guilty were adhered to at the sentence hearing at the Wagga Wagga District Court on 23 October 2023 and accordingly the offender is entitled to consideration for facilitating the course of justice, including the utilitarian value of the pleas of guilty, which I assess at the numerical value of 25%. Sentence proceedings were conducted on 4 April 2024 and 7 June 2024.

3. The maximum penalty for each of those offences is 10 years imprisonment.

4. Further, when passing sentence the offender asks that I take into account a further matter attaching to a schedule pursuant to s 16BA of the Crimes Act 1914. That matter is a further charge of Attempt to Dishonestly Obtain a Financial Advantage from a Commonwealth Entity the sum subject of the attempt being $27,766.00.

5. As I understand the authorities, so far as dealing with the schedule pursuant to s 16BA of the Crimes Act 1914 the principles enunciated by the Court of Criminal Appeal of New South Wales in The Attorney General’s Application Under s 37 of the Crimes (Sentencing Procedure) Act, 1999 No. 1 of 2002, otherwise known as the Guideline Judgment on Form 1 matters (2002) 56 NSWLR 146 apply.

Facts

6. The offender is a co-offender to Wayne Garrett who was sentenced at this court on 17 November 2023 and Harley Armstrong who was sentenced at this court on 15 December 2023. I will set out the sentences imposed on them later in these reasons under the heading “parity”.

7. The facts are before the Court by way of a set of agreed facts. For the purposes of proceeding to sentence I am satisfied of the following beyond reasonable doubt.

8. In March 2022 police lawfully intercepted telecommunications used by the co-offender Garrett. From hearing the matters involving the two co-offenders it is tolerably plain that police were investigating the supply of prohibited drugs. However, investigators monitoring the lawfully intercepted calls and text message identified that the offender was involved in the submission of false information to the Australian Taxation Office (ATO).

9. Between 7 April 2022 and 29 April 2022 the offender lodged business activity statements (BAS) to the ATO. The offender claimed to have made business purchases to obtain GST input credits (refunds). The offender did not carry on a business enterprise at any stage during the offending and accordingly each BAS and amended BAS he submitted contained false information. He was not entitled to the refunds that he claimed. Annexed to the facts is a table setting out the details of the statements the offender submitted.

10. The facts explain that the GST is a 10% tax on goods and services in Australia. It is collected by registered businesses at each step in the supply chain. If the business is registered for GST it sends the GST it collects less GST credits it can claim to the ATO monthly, quarterly or annually. GST registered taxpayers are required to report the periodic tax obligations and entitlements to the ATO on a business activity statement. For an entity to participate in the BAS lodgement process it is required to hold an Australian Business Number (ABN) which then allows a GST registration to take place. On the BAS the business is asked to include the GST charged on sales made to customers and the GST which the business pays for purchases from suppliers, called a GST credit. Based on the figures set out in the BAS, the entity must then determine whether they are entitled to a GST refund from the Commonwealth or whether they have a tax liability to the Commonwealth arising out of GST collected sales. If a refund is owed to the entity for the Commonwealth the ATO deposits the amount of the refund via electronic funds transfer into a nominated bank account. The GST system of taxation relies upon the honesty of business entities in completing the BAS.

11. The facts then set out the procedure in accessing the ATO online via myGOV. A myGOV account enables a person to create a link to the ATO online services. Sole traders operating a business registered for GST may lodge and revise the BAS by accessing the ATO online via such an account. Only a user who has successfully authenticated in myGOV and has linked their myGOV account to the ATO can access the ATO online. A unique email address is required to create such an account. The users are provided with the user name and login procedures.

12. On 15 March 2022 the offender registered an ABN with an effective start date of 15 March 2022. The offender listed his main business activity as cleaning windows. On 22 March 2022 the offender called the ATO for assistance with his activity statement obligations. He was advised how to set up a MyGov ID and access online BAS. On 6 April 2022 the offender called the ATO to register for GST and backdate his ABN to 1 October 2021.

13. Throughout the offending period this offender was in regular contact with the co-offender Garrett.

14. Going to Sequence 1 on 7 April 2022, using ATO on line the offender lodged an activity statement for the period 1 October 2021 to 3 December 2021. As a result of that lodgement, on 14 April 2022 the offender was issued a refund in the amount of $15,724 to which he was not entitled. This sum of money was paid into the offender’s bank account.

15. In respect of Sequence 2 (i.e. the matter attaching to the s 16BA Schedule), on 13 April 2022 the offender sent Garrett a screenshot of a message to the offender from the ATO telling him to lodge his first statement on time. Garrett told the offender to “just put 0000 in all boxes”. On 15 April 2022 the offender lodged an amended activity statement. He also had an SMS conversation with Garrett. The full exchange is set out at page 4 of the facts. Garrett asks this offender as to whether he wanted “to do that tax again”. There was a discussion as to when the next lodgement would take place. Garrett said to this offender, “No no that’s how it works and that’s why they have revised so you can amend it he’s gonna make sure you put the right digits in so it doesn’t look sus that’s my part.”

16. Following this exchange at 9:24 am the offender called Garrett and they agreed to lodge an amended BAS together. Garrett explained the process to the offender. The offender agreed to lodge an amended BAS with Garrett saying “Yeah I suppose. If you want. You have to come up to me but”. Further messages were exchanged.

17. At 12:52 pm on 15 April 2022 using ATO online Garrett and the offender lodged an amended activity statement for the period 1 October 2021 to 3 December 2021. They attempted to obtain a further $27,766 and GST refunds. On 23 April 2022 the offender and Garrett had a telephone call in which they discussed the GST refund. On 26 April 2022 the offender and Garrett had another phone call in which they discussed the ATO fraud. Garrett said to this offender, “It’s not good bro… I think someone’s dobbed us in.” Garrett told the offender that they wouldn’t do any more on the offender’s ATO until he “gets the all clear”.

18. Going now to Sequence 3 (i.e. the remaining substantive matter), the following day that is 27 April 2022 the offender messaged Garrett as screenshot of his ATO summary of activity statements. The offender said “We’ll have to do next months”.

19. On 29 April 2020 to the ATO audit finalisation letter was issued for the period 1 October 2021 to 3 December 2021. The letter advised that the amounts reported were incorrect because the ATO held no information that the offender was carrying on a business. On the same date, and ATO notice amended assessment of net amount was issued to the offender. The letter advised that the GST credit of $43,490 has been amended to $0.

20. Further on 29 April 2022 using ATO online the offender lodged an activity statement for the period 1 January 2022 to 31 March 2022 and attempted to obtain a further $29,801 in GST credits.

21. On 18 May 2022 letter was issued to the offender advising of the ABN cancellation effective from 31 March 2022. On that same day to letter was issued advising the GST cancellation from 31 March 2022. On 19 May 2022 an ATO audit finalisation letter was issued advising the offender that the ATO had decided that he was not running an enterprise for tax purposes and that he was not entitled to the refunds that he had claimed. Further on that same day a further amended notice of assessment was issued to the offender advising that the GST credit of $29,801 had been amended to $0.

22. On 6 June 2022 the offender called the ATO and advised that he had lodged the original BAS for the 4 December 2021 period but not a subsequent revision. He further advised that he did not lodge the BAS for the 4 March 2022 period. The offender said he believed his myGov account had been accessed.

23. Further on 6 June 2022 an officer from the ATO call the offender and advised his bank account had been frozen. The offender asked about the fraud that had been conducted on his account. The offender advised he does not conduct a business and that he spent the $15,000 that had already been credited to the account. On 8 August 2022 the offender called the ATO querying statement of account. During the call the offender advised again that he had spent the $15,724 refund.

24. On 2 December 2022 police attended the offender’s home and spoke with him. He was cautioned. The offender confirmed his telecommunications number and told police that he was unemployed. He thereafter remained silent.

Assessment

25. Although there are two charges (and one on a s 16BA schedule) the offending is essentially one ongoing course of conduct. The amounts of money are not insubstantial but they are not as substantial as those involved in the matters involving Garrett and Armstrong. The offender obtained $15,724 by his fraudulent activity and attempted to obtain a further $57,567 by the same fraudulent activity. The fraudulent activity was limited to some few weeks duration.

26. Although there was some degree of sophistication it is clear enough that the offender would not have been able to perpetrate the criminal activity without the assistance of Garrett. However, it was necessary for the offender to register a business entity and obtained an ABN.

27. In all the circumstances, noting the amount of money involved, the matter is less serious than the offending engaged in by Garrett and indeed Armstrong. Any tax fraud is a serious matter. However, given the matters to which I have referred the matter is below the mid-range of seriousness, but not at or close to the bottom of the range.

Criminal history

28. The offender was born on 18 September 1981 and accordingly was 41 years of age at the time of the offending and is 43 at the time of sentence. He has been convicted of street offences, larceny, serious driving offences including driving whilst disqualified, assault occasioning actual bodily harm, damage property, and contravention of an apprehended violence order. The offender has a record that does not entitle him to any particular leniency, however, his criminal history could not amount to a factor of aggravation.

29. The most recent of the two Sentence Assessment Reports sets out (p. 2):

“On 25 February 2024, 6 March 2024 and 12 March 2024 Mr Brady reoffended; drive motor vehicle not carry licence, drive motor vehicle while licence suspended – 2^nd + offence. On 17 April 2024 a warrant was issued for Mr Brady’s arrest due to failing to appear in Wagga Wagga Local Court. Mr Brady received a 12 month community correction order. On the 3 June 2024 Mr Brady attended Wagga Wagga Local Court for the offence drive while licence suspended – 2^nd+ offence and received a fine and his license suspended for 12 months”.

30. Although these matters are traffic matters mostly of a regulatory type nature, it is a concern that the offender re-offended while these sentence proceedings were pending.

Some aspects of s 16A(2) Crimes Act 1914 (Cth)

31. When setting out the facts and making an assessment of the seriousness of the matters I have dealt with the nature and circumstances of the offences – see s 16A(2)(a) of the Crimes Act 1914 (Cth). I note and have regard to the requirement set out in s 16A(1) that the court is required to impose a sentence that is of a severity appropriate in all the circumstances of the offence. In this regard I also note and have regard to s 16A(2)(k) that in passing sentence I must take into account the need to ensure that the offender is adequately punished.

32. Going to the other matters mandated by s 16A(2) of the Crimes Act 1914 there is one other offence to be taken into account. I am satisfied that the offending does amount to a course of conduct, although the period over which it was committed was limited to a few weeks.

33. The victim is the Commonwealth. While the offending is most certainly not a victimless crime in that honest taxpayers are the ultimate victims of the offending, I am not able to make any finding so far as s 16A(2)(d) of the Crimes Act 1914 is concerned. The amount actually obtained was $15,724 and attempts were made to obtain further sums in the total amount of $57,567. Those figures combined amount to $73,291, which is a not insubstantial sum. Section 16A(2)(ea) is not relevant to the matter presently under consideration.

34. Section 16A(2)(f) concerns contrition. No oral evidence was called from the offender. Nor was any expert material such as a psychological report put before the court. The court is assisted by two reasonably comprehensive Sentencing Assessment Reports, one dated 14 February 2024 and the other dated 4 June 2024. Neither report is positive, and on any fair reading the second report is more negative than the first.

35. In the report of 14 February 2024, under the heading, “Attitudes” (p 2 of 5) the following appears:

“While he was hesitant to discuss his offences, Mr Brady did disclose that the cause of his actions were due to his excessive use of illicit substances, his poor financial management as a result of his illicit substance addition and wanting to purchase himself a new vehicle due to his current one having mechanical issues”.

36. Further, under the heading “Responsivity” the following appears:

“Mr Brady was able to voice the impact had on the legal system as a result of his offending due to the police having to conduct an investigation, Community Corrections having to write a report and the Courts having to sentence him. He was also able to speak about the impact on his family and how they may feel stressed while he is awaiting sentence”.

37. There is nothing within the second report (4 June 2024) which assists the offender on any finding of remorse or contrition.

38. In all of the circumstances there is nothing on which I could base any finding on balance that the offender has shown any contrition or remorse. Given that the offender’s source of income is social security benefits it is highly unlikely that any of the $15,724 will be repaid.

39. As I observed when dealing with the co-offenders, there is an issue of general deterrence to be addressed in this sentencing matter. Unlike the co-offender Armstrong this offender has no issue of mental condition that ameliorates the impact of general deterrence. On the issue of general deterrence the plurality said in Hili & Jones v The Queen (2010) 204 A Crim R 434 at [63]:

“The applicants' offending was sustained over 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, the sentences imposed had to have both a deterrent and a punitive effect, and those effects had to be reflected in the head sentences and the recognizance release orders that were made.”

40. The offending in that case was more serious than the matter under consideration and occurred over a longer period of time. However, that part of the extract above about acting out of personal greed, detection not being easy, tax fraud affecting the whole community and the need for general and specific deterrence has a broader application and is certainly apposite to the matter presently under consideration.

41. I now go to the subjective material tendered on behalf of the offender. As Mr Swaine of counsel, who despite the limited material he was given to work with has done and said everything he possibly could have done and/or said for the offender, puts in his written submissions (paragraph 40), “The offender has instructed that a psychological report not be obtained for these sentence proceedings”.

42. The submissions go on to outline that the offender is the father of three children with whom he remains in contact. He resides in the Junee area and is currently unemployed and is currently in receipt of a Job Seeker allowance.

43. This is as good a place as any within these remarks to deal with the second Sentence Assessment Report. At p 1 under the heading “Updated information” the following appears:

“Mr Brady has had a notable decline in his participation with Community Corrections. While Mr Brady remains in contact with his officer, he continues to fail to comply with the additional conditions provided him by the Wagga Wagga Local Courts. Mr Brady continues to use illicit substances and often voices paranoid delusions during interviews which has proved to be challenging during the implementation of behaviour change conversation. Mr Brady demonstrates significant resistance to change and refuses to engage for support from external services”.

44. Although the offender engaged with the Calvary Riverina Drug and Alcohol Centre on 28 March 2024 for the initial screening assessment which deemed him suitable for residential rehabilitation, the centre has since indicated they require the offender to undergo a psychiatric review. The offender refused to participate in that review. The offender was referred to Pathways Murrumbidgee to complete the Alcohol Drug Awareness Prevention Training but has declined any support from that service.

44. The only material on which I can make any findings as to the prospects of rehabilitation and the likelihood of re-offending is the Sentencing Assessment Reports. That report dated 14 February 2024 assesses the offender at a high risk of re-offending. There is nothing in the second report to suggest otherwise. Given that assessment, taken with the criminal history, I am quite unable to make any positive finding that the offender is unlikely to re-offend.

45. At page 3 of the first SAR the following appears:

“Mr Brady has demonstrated an inability and unwillingness to engage with external service providers to address his offending behaviours. While multiple attempts have been made and referrals provided for him to address his offending, he continues to demonstrate significant resistance to actioning these supports”.

47. Further, the author of the report bluntly but appropriately expresses:

“Mr Brady has extensive history of supervision with Community Corrections. He is currently on a supervision order for an offence unrelated to his new offences. His response to his current supervision order is deemed unsatisfactory. He is failing to comply with the additional conditions provided to him by the courts pertaining to drug and alcohol counselling, rehabilitation and mental health intervention”.

48. Then, and again not favourably to the offender:

“Mr Bardy continues to use illicit substances and has failed to action a number of directions and referrals provided to him regarding his engagement in alcohol and other drug counselling and attending residential rehabilitation.”

49. Given this and in the absence of any other material clearly any court would not be able to make any positive finding on the offender’s prospects of rehabilitation. Clearly enough the offender has to engage in some serious thought and introspection about his offending ways, his use of illicit substances and the need to lead a pro-social life, which hitherto he has been unable to do. I am very circumspect about the offender’s prospects of rehabilitation.

Parity

50. The principal of parity has substantial work to do in this sentencing exercise. Although the co-offenders have been previously mentioned within these reasons, it is appropriate to note under the heading of parity that on 17 November 2023 Garrett was sentenced to a total sentence of 3 years 4 months with a non-parole period of 1 year 9 months. That sentence followed early pleas of guilty to a total of three offences, being an actual fraud, an attempted fraud and a further attempted joint fraud (including with this offender).

51. As Mr Swaine (paragraphs 52ff) submits in his written submission on any view, noting that the total sums involved amounted to $180,095 actual fraud and $50,644 attempted fraud, this offending was considerably more serious than with Brady. Clearly enough, Garrett was the “mastermind” behind the enterprise. Garrett also had a substantial criminal history.

52. Armstrong is a little more complicated in that the court also dealt with an appeal from the Local Court in respect of sentences that related to the supply of prohibited drugs. The actual fraud in his matter was $64,092 and there was a further attempted fraud of $123,855. Accordingly, Armstrong’s offending is also more serious than the matter presently under consideration.

53. In respect of the Commonwealth Fraud matters the court imposed a sentence of 2 years 9 months with release on a Recognizance Release Order after serving 15 months. However, in his matter I also found that there was a causal connection between a mental condition and the offending, which enlivened the principles enunciated by McClellan CJ at CL in DPP (Cth) v De La Rosa (2010) 79 NSWLR 1 at [177]-[178] reducing his moral culpability and the impact of general and specific deterrence. Armstrong had a much stronger subjective case than this offender.

54. Be that as it may, clearly enough the sentence to be imposed on this offender will need to be markedly less than either of the other two co-offenders.

Submissions

55. With his usual courtesy and thoroughness, Mr Swaine for the offender provided well in advance comprehensive written submissions going to the seriousness of the matter, and the various factors that need to be addressed pursuant to s 16A(2) of the Crimes Act, 1914.

56. Oral submissions were quite brief given the comprehensive written submissions. Essentially, as I understood the submissions advanced on behalf of the offender it was accepted that there would be a sentence of imprisonment, but the court would permit the offender to serve that sentence by of Intensive Correction Order.

General Remarks

57. With their usual thoroughness the Commonwealth have provided a number of authorities said to be like cases, those authorities being Acosta v R [2015] VSCA 94, Rasel v R [2022] NSWCCA 239, and Sabra v R [2015] NSWCCA 38. I have read and considered those authorities. The amounts of money involved in Rasel are quite similar to the matter presently under consideration but the offending was different in that nine false tax refunds over two days and a further 20 false tax returns over 57 days. The matter also involved the offender using his position of employment in accessing identification information.

58. I note and have regard to s 17A(1) of the Crimes Act 1914 that provides:

A court shall not pass a sentence of imprisonment on any person for a federal offence, or for an offence against the law of an external Territory that is prescribed for the purposes of this section, unless the court, after having considered all other available sentences, is satisfied that no other sentence is appropriate in all the circumstances of the case.

59. However, given the offending, the need for general deterrence, the issue of parity I am firmly of the opinion that there must be a sentence of imprisonment imposed. I understood counsel for the offender to concede as much, but maintain any sentence should be served by way of Intensive Correction Order.

60. The authority of DPP (Cth) v Beattie (2017) 270 A Crim R 556 at [146] is or at least was authority for the proposition that an aggregate sentence pursuant to s 53A of the Crimes (Sentencing Procedure) Act 1999 can be imposed in respect of Commonwealth offending. At the sentence hearing on 7 June 2024 it was submitted by the Commonwealth that that authority should no longer be followed. Accordingly, I will not do so. Separate sentences will need to be imposed with a commencement date. There will need to be some degree of meaningful partial accumulation of the sentence for the fraud matters.

61. In respect of the Sequence 1, taking into account the matter on the s 16BA schedule the appropriate sentence is 13 months, which indicates a starting point of 18 months with some minor mathematical rounding down in favour of the offender. In respect of sequence 3, the appropriate sentence is 10 months which indicates a starting point of 14 months, again with some minor mathematical rounding down in favour of the offender. There should be some partial accumulation making a total sentence of 15 months.

62. Now to the issue as to means by which the sentence is to be served. As I understood Mr Swain’s ultimate submission the court would conclude that a custodial sentence was required but that the court would permit the offender to serve that sentence by way of Intensive Correction Order.

63. Initially I observe that as this matter deals with Commonwealth offending some different considerations apply. In particular I note and have regard to s 16A(1) and s 16A(2)(k) of the Crimes Act 1914 (Cth), which relevantly provide that the court must impose a sentence of a severity appropriate to the offending and that the court must ensure that the offender is adequately punished.

64. Chan v R [2023] NSWCCA 206 appears to be authority for the proposition that so far as Commonwealth offending is concerned the Crimes Act 1914 takes precedence over State legislation when determining whether the threshold within s 17A(1) of the Crimes Act 1914 is crossed and the length of any sentence; but if the court is considering an Intensive Correction Order, s 66 of the New South Wales Crimes (Sentencing Procedure) Act 1999 and the body of authority that has developed takes precedence.

65. Section 66 of the Crimes (Sentencing Procedure) Act relevantly provides:

1. Community safety must be the paramount consideration when the sentencing court is deciding whether to make an intensive correction order in relation to an offender.

2. When considering community safety, the sentencing court is to assess whether making the order or serving the sentence by way of full-time detention is more likely to address the offender’s risk of reoffending.

3. When deciding whether to make an intensive correction order, the sentencing court must also consider the provisions of section 3A (Purposes of Sentencing) and any relevant common law sentencing principles, and may consider any other matters that the court thinks relevant.

66. There has been a great deal of litigation concerning this legislation. I note that the Honourable Mark Speakman SC, the then Attorney General in the Second Reading Speech introducing the Crimes (Sentencing Procedure) Amendment (Sentencing Options) Bill 2017 (the 2018 sentence reforms) said:

“These orders [a reference to Intensive Correction Orders] will be available for offenders sentenced to up to two years imprisonment, except for the following offences: murder, manslaughter, sexual assault, child sexual offences, offences involving the discharge of a firearm, terrorism offences and breaches of serious crime prevention orders and public safety orders. In addition, a court must not impose an intensive correction order for a domestic violence offence unless satisfied that it will adequately protect the victim or any likely co-resident of the offender.

Proposed section 66 of the Crimes (Sentencing Procedure) Act will make community safety the paramount consideration when imposing an intensive correction order on offenders whose conduct would otherwise require them to serve a term of imprisonment. Community safety is not just about incarceration. Imprisonment under two years is commonly not effective at bringing about medium- to long-term behaviour change that reduces reoffending. Evidence shows that community supervision and programs are far more effective at this. That is why proposed section 66 requires the sentencing court to assess whether imposing an intensive correction order or serving the sentence by way of full-time detention is more likely to address the offender's risk of reoffending.

Proposed section 73 of the Crimes (Sentencing Procedure) Act sets out the standard conditions of the intensive correction order—namely, not to commit an offence and to submit to supervision. All offenders will be required to submit to supervision. Community corrections uses a risk framework that assigns different levels of intensiveness to each offender's supervision. Offenders who are at high risk of reoffending and have complex issues are supervised intensively. Supervision for lower risk offenders is less intensive and may be suspended in appropriate circumstances. The discretion to suspend supervision will be subject to requirements specified in the regulations to ensure that the power is properly exercised and does not go unfettered. Proposed section 73A provides for the additional conditions of the intensive correction order, which will enable courts to tailor the order to hold offenders accountable and to tackle their offending behaviour.

Courts will be required to impose at least one of the conditions in proposed subsection (2) in addition to the standard conditions in section 73, but can set a time limit on how long the order is in force.”

67. The plurality (Gordon, Edelman, Steward and Gleeson JJ) in Stanley v DPP [2023] HCA 3 said at [72]-[77]:

“[72] There was no dispute before this Court that s 66 imposes specific mandatory considerations upon the decision maker to make, or refuse to make, an ICO. Section 66(1) requires the court to treat community safety as the "paramount consideration". In the context of s 66(2), community safety principally concerns the possible harms to the community that might occur in the future from the risk of reoffending by the offender. The issue is not merely the offender's risk of reoffending, but the narrower risk of reoffending in a manner that may adversely affect community safety.

[73] The identification of community safety in s 66(1) as the "paramount" consideration also indicates that s 66 is concerned with an aspect of the sentencing task that requires the sentencing court to have a particular and different focus at the third stage of the three-step process described earlier. When the court is deciding the discrete question whether or not to make an ICO, community safety is the consideration to which other considerations are to be subordinated, although other considerations must or may be taken into account as prescribed by s 66(3).

[74] Section 66(2) explains how the sentencing court must engage with the paramount consideration of community safety. For the purpose of addressing community safety, s 66(2) requires the sentencing court to undertake a task of assessing the possible impacts of an ICO or full-time detention on the offender's risk of reoffending. Section 66(2) gives effect to Parliament's recognition that, in some cases, community safety will be better promoted by a term of imprisonment served in the community than by full-time detention. Section 66(2) is premised upon the view that an offender's risk of reoffending may be different depending upon how their sentence of imprisonment is served, and implicitly rejects any assumption that full-time detention of the offender will most effectively promote community safety. Thus, s 66(2) requires the sentencing court to look forward to the future possible impacts of the sentence of imprisonment, depending upon whether the sentence is served by way of full-time detention or by way of intensive correction in the community.

[75] The assessment required by s 66(2) is not determinative of whether an ICO may or should be made. To the contrary, as is plain from s 66(3), the assessment is required for the purpose of addressing community safety as the paramount, but not the sole, consideration in deciding whether or not to make an ICO. Thus, the power to make an ICO requires an evaluative exercise that treats community safety as the paramount consideration, with the benefit of the assessment mandated by s 66(2). In that respect, the nature and content of the conditions that might be imposed by an ICO will be important in measuring the risk of reoffending.

[76]   That said, community safety will usually have a decisive effect on the decision to make, or refuse to make, an ICO, unless the relevant evidence is inconclusive. There may be cases where a court cannot be satisfied whether serving a sentence by way of intensive correction in the community or serving a sentence in full-time custody would be more likely to address reoffending. In those cases, other factors will assume significance and will be determinative. On the other hand, there will be cases where a court concludes that serving the sentence by way of intensive correction in the community is more likely to address reoffending.

[77]   While aspects of community safety underpin some of the general purposes of sentencing, such as specific and general deterrence and protection of the community from the offender, those aspects will have been considered in deciding whether to impose a sentence of imprisonment (ie, before considering an ICO). Community safety is required to be considered again and in a different manner under s 66 when considering whether to make an ICO. At this third step, community safety in s 66(1) is given its principal content by s 66(2), namely, the safety of the community from harms that might result if the offender reoffends, whether while serving the term of imprisonment that has been imposed or after serving that term of imprisonment.” (Citations omitted.)

68. Since the decision in Stanley v DPP there have been a number of decisions of the Court of Criminal Appeal on the subject. Gleeson JA (Hamill J agreeing with brief additional comments, Ireace J agreeing) in Zheng v R [2023] NSWCCA 64 at [281]-[286] said (footnotes omitted):

“[281] Five points emerge from the joint judgment in Stanley.

[282] First, the power to make an ICO requires an evaluative exercise that treats community safety as the paramount consideration, with the benefit of the assessment mandated by s 66(2). The issue is not merely the offender’s risk of reoffending, but the narrower risk of reoffending in a manner that may affect community safety.

[283] Second, s 66(2) is premised upon the view that an offender's risk of reoffending may be different depending upon how their sentence of imprisonment is served, and implicitly rejects any assumption that full-time detention of the offender will most effectively promote community safety.

[284] Third, the nature and content of the conditions that might be imposed by an ICO will be important in measuring the risk of reoffending.

[285] Fourth, the consideration of community safety required by s 66(2) is to be undertaken in a forward-looking manner having regard to the offender’s risk of reoffending.

[286] Fifth, while community safety is not the sole consideration in the decision to make, or refuse to make, an ICO, it will usually have a decisive effect unless the evidence is inconclusive.”

69. In Tonga, Samuel [2023] NSWCCA 120 Basten AJA (Walton & Hamill JJ agreeing, both with additional comments) said at [49]:

“Accepting that the judge did indeed give weight to general deterrence in declining to impose an ICO, the applicant’s submission seeks to draw a bright line between community safety and other purposes of criminal sentencing. Of the seven purposes identified in s 3A of the Sentencing Act, there may be tensions between some, or between some in some circumstances, but often they will militate in favour of the same outcome. While it is true that s 66(2) addresses that element of community safety which concerns the individual offender’s risk of reoffending (in a particular way), as Stanley recognised, that is not to exclude other aspects of sentencing which may affect community safety, nor purposes such as general deterrence which do not focus upon the individual but may tend to protect community safety. It was not an error to take general deterrence into account: s 66(3) permitted that course. The decision as to whether or not to impose an ICO is not to be determined solely by reference to an assessment of the course more likely to address the offender’s risk of reoffending; and when that course cannot be identified, other mandatory considerations will become significant and possibly decisive.”

70. Earlier in that decision (at [20]), Basten JA observed:

‘Were an ICO not seen as a more lenient sentence than the same period served in custody, there would be no application for leave to appeal. Secondly, whether or not one thinks that the proposed supervision plan amounts to ‘intensive correction’, it would have been vastly less intrusive than a fulltime deprivation of liberty.’”

71. The Court of Criminal Appeal in DG (No. 1) v R [2023] NSWCCA 320 disapproved the practice of deducting any period spent in custody bail refused from a sentence in order to get the length of the sentence within the limits whereby the sentence can be served by way of Intensive Correction Order. That issue does not arise in the matter presently under consideration.

72. One further and more recent decision is Khanat v R (Cth) [2024] NSWCCA 41. Cavanagh J (Ireace J agreeing, Wilson J dissenting) said at [83]:

“The question of whether the degree of leniency attached to an ICO may be a relevant factor was taken up N Adams J in Chan. Her Honour stated at [139]-[140]:

‘There can be no doubt that imposing an ICO involves a degree of leniency. In Pullen Harrison J observed the following at [53]:

“Although an ICO ordinarily involves substantial punishment, it also reflects a significant degree of leniency: R v Pogson; R v Lapham; R v Martin (2012) 82 NSWLR 60; [2012] NSWCCA 225 at 84 [106]; Whelan v R (2012) 228 A Crim R 1; [2012] NSWCCA 147 at [120].”’

73. Cavanagh J went on to say at [89]-[95]:

“[89] Having said that it does not seem to me that anything said in Stanley leads to the conclusion that a positive finding that the risk of reoffending is best addressed by serving the sentence in the community mandates the ordering of an ICO. That is, I reject the applicant's primary submission that once the positive finding was made an ICO must necessarily have been ordered.

[90] I say this for the following reasons.

[91] Firstly, in Stanley (at [75]) their Honours stated that the assessment required by s 66(2) is not determinative of whether an ICO may or should be made. As required by s 66(3), when deciding whether to impose an ICO, the sentencing court must also consider the provisions of s 3A and any other relevant common law sentencing principles and may consider any other matters that the Court thinks relevant. The exercise is thus evaluative, albeit community safety must be treated as the paramount consideration.

[92] Secondly, although the Court observed (at [76]) that community safety will usually have a decisive effect unless the relevant evidence is inconclusive, there is no suggestion that an ICO must be ordered consequent on a positive finding on addressing the risk of reoffending. It may usually have a decisive effect but that leaves open the possibility that there will be circumstances in which, even giving paramountcy to community safety and a positive finding on the risk of reoffending, an ICO may not be ordered.

[93] The Court did not identify what those circumstances might be but left open the possibility that, having considered the matters referred to in s 66(3), the sentencing court may decline to impose an ICO subject to having given paramountcy to community safety in its consideration.

[94] Thirdly, the sentencing exercise is essentially discretionary. The sentencing court comes to a decision as to sentence through a process of instinctive synthesis. I do not take anything said in Stanley to be fundamentally altering that approach.

[95] It follows that I do not accept that a positive or conclusive finding that the risks of reoffending are better addressed in the community mandates an order for an ICO.”

74. Returning to the matter presently under consideration so far as the considerations of s 66(1) and s 66(2), the findings are at best neutral. At the brief sentence hearing on 7 June 2024 I indicated to both counsel that given the negative aspects of the Sentence Assessment Reports and noting the recent offending the most charitable I could be towards the offender is that the findings were neutral. I understood both counsel to accept that the findings would be neutral.

75. In particular the concerns I have as to public safety is the offender has unresolved substance abuse issues and possible mental health issues but is utterly resistant to any treatment or intervention. On the issue of re-offending I note that the offender has re-offended, but not in a similar way to the matter presently under consideration while this matter has been pending in this court. Despite these concerns my findings in respect of s 66(1) and s 66(2) are neutral.

76. Accordingly, the considerations in s 66(3) are determinative of whether the court orders that the sentence be served by way of Intensive Correction Order. I will go initially to consider s 3A of the Sentencing Act, which sets out the purposes of punishment, namely:

1. to ensure that the offender is adequately punished for the offence,

2. to prevent crime by deterring the offender and other persons from committing similar offences,

3. to protect the community from the offender,

4. to promote the rehabilitation of the offender,

5. to make the offender accountable for his or her actions,

6. to denounce the conduct of the offender, and

7. to recognise the harm done to the victim of the crime and the community.

77. I am of the opinion that for the offender to be adequately punished there should be some period in actual custody. I have already dealt with the issue of general and specific deterrence when dealing with the provisions of s 16A(2) of the Crimes Act 1914. It is clear from the various authorities that general deterrence is an important aspect of the sentencing exercise. Given the contents of the Sentence Assessment Reports and the re-offending while this matter is pending, specific deterrence also has work to do in this matter.

78. The concerns I expressed earlier about the offender’s untreated substance abuse and mental health issues are relevant to the protection of the community.

79. The offender has steadfastly refused any assistance offered by Community Corrections so far as rehabilitation is concerned. Mr Swaine submitted orally on 7 June 2024 that the court should extend the offender the chance of an ICO in order to show that he can engage. Given the complete lack of failure to engage with the relevant agencies thus far I could have no confidence that an ICO would promote the offender’s rehabilitation.

80. Further, I am of the opinion that some period in actual custody will better address the issues of making the offender accountable and denunciation. Earlier in these reasons I made the point that tax fraud is not a victimless crime. Full time custody will better address recognising the harm done to the community.

81. Finally, without double counting I also note and have regard to s 16A(1) and s 16A(2)(k) of the Crimes Act 1914.

82. For those reasons I decline to order that the sentence of imprisonment be served by way of Intensive Correction Order. Although there are two offences, I will need to set single terms of actual custody and set a single recognizance release order.

Orders

83. In respect of the offences to which the offender has pleaded guilty he is convicted.

84. In respect of the Sequence 1 taking into account the matter on the s 16BA schedule the offender is sentenced to imprisonment for 13 months to commence on 18 June 2024.

85. In respect of Sequence 3 the offender is sentenced to imprisonment for 10 months to commence on 18 November 2024.

86. After a period of seven (7) months the offender is to be released upon him entering a recognizance pursuant to s 20(1)(b) of the Crimes Act 1914 (Cth) himself in the sum of $1000 to be of good behaviour for a period of 2 years . That recognizance is to be conditioned that the offender will:

1. Be of good behaviour;

2. Appear for sentence in respect of any breach with the period of the recognizance;

3. Notify the Registrar of this court of any change of address; and

4. Be supervised by the Department of Community Corrections and obey all reasonable directions of officers of that Department, and in particular to obey all reasonable directions as to ongoing treatment and counselling relating on substance abuse and mental health issues.

87. It is the court’s intention that the offender be released on acknowledging the recognizance release order on 17 January 2025.

88. I make a reparation order in favour of the Commonwealth in the sum of $15,724.

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Decision last updated: 22 July 2024