R v Edelbi

[2021] NSWCCA 122

Court of Criminal Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

R v Edelbi [2021] NSWCCA 122

Hearing dates:

28 April 2021

Decision date:

16 June 2021

Before:

Hoeben CJ at CL at [1]
Bellew J at [2]
Hidden AJ at [16]

Decision:

(By majority)

(1)   Leave to appeal granted.

(2)   Appeal allowed; sentence imposed in the District Court on 12 May 2020 quashed.

(3)   In lieu thereof the applicant be sentenced to an aggregate term of imprisonment for 1 year and 11 months, commencing on 16 June 2021 and expiring on 15 May 2023.

(4) Pursuant to s 7(1) of the Crimes (Sentencing Procedure) Act 1999, the sentence to be served by way of intensive correction in the community.

(5)   In addition to the prescribed standard conditions, a condition that the applicant must receive any psychological treatment recommended to him applies.

Catchwords:

CRIMINAL LAW – application for leave to appeal against sentence – fraud offences – aggregate sentence – whether in reasons for sentence the trial judge should have considered an intensive correction order – requirements of s 66 Crimes (Sentencing Procedure) Act 1999 – whether offences amounted to a breach of trust – whether trial judge’s finding as to objective gravity open

Legislation Cited:

Crimes Act 1900 (NSW)

Crimes (Sentencing Procedure) Act 1999 (NSW)

Criminal Appeal Act 1912 (NSW)

Motor Accidents Compensation Act 1999 (NSW)

Cases Cited:

Attorney-General’s Application under s 37 of the Crimes (Sentencing Procedure) Act 1999 No 1 of 2002 (2002) 56 NSWLR 146

Blanch v R [2019] NSWCCA 304

Cassella v R [2019] NSWCCA 201

FL v R [2020] NSWCCA 114

Franklin v R [2016] NSWCCA 319

Karout v R [2019] NSWCCA 253

Mandranis v R [2021] NSWCCA 97

Mulato v R [2006] NSWCCA 282

Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39

Pearce v The Queen (1998) 194 CLR 610

R v Fangaloka [2019] NSWCCA 173

R v Smith [2000] NSWCCA 140

R v Stanbouli [2003] NSWCCA 355; (2003) 141 A Crim R 531

Ridley v R [2008] NSWCCA 324; (2008) 192 A Crim R 139

Suleman v R [2009] NSWCCA 70

Wany v DPP [2020] NSWCA 318

Category:

Principal judgment

Parties:

Mohammad Edelbi (Applicant)
Regina (Respondent)

Representation:

Counsel:
T Game SC, P Lange (Applicant)
M Millward (Respondent)

Solicitors:
Abbas Jacobs Lawyers (Applicant)
Director of Public Prosecutions (Respondent)

File Number(s):

2017/285764

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

District Court of NSW

Jurisdiction:

Criminal

Citation:

Not applicable

Date of Decision:

12 May 2020

Before:

Hock DCJ

File Number(s):

2017/285764

Judgment

1. HOEBEN CJ at CL: I agree with Hidden AJ and the orders which he proposes. I particularly note his Honour’s unwillingness to engage in the “controversy” as to the proper construction of s 66 of the Crimes (Sentencing Procedure) Act 1999 (NSW).

2. BELLEW J: I have had the advantage of reading, in draft, the judgment of Hidden AJ.

3. I agree, for the reasons that his Honour has given, that grounds 2, 3 and 4 are not made out.

4. I also agree, for the reasons that his Honour has given, that ground 1 is made out and that, as a consequence, it is necessary for this Court to re-sentence the applicant in the fresh exercise of its discretion.

5. However, I find myself unable to agree with his Honour’s proposed orders in respect of re-sentence. As I am in the minority, my reasons need only be brief.

6. In terms of the offending I make the following observations.

7. The applicant was a member of a criminal group, the conduct of which was directed to the perpetration of a serious fraud. The applicant’s role within the group was hardly a peripheral one. He occupied a managerial position in which he exercised control over the system of invoicing. This included managing the invoices, income, bookkeeping and finances of the group. He was responsible for the creation, directly or indirectly, of a large number of false documents. These included account statements which included multiple references to professional services which were never rendered, and records of appointments for such services which were wholly fictitious. Those appointments were created at the applicant’s direction. He had responsibility for reviewing and sending the false documents, receiving the payments and banking them. The applicant’s role was essential to the criminal activity carried out by the group of which he was a member. Without the applicant performing that role, the fraudulent scheme could never have been put into effect.

8. Given the period over which it took place, the applicant’s offending could not be described as aberrant. It also involved a substantial sum of money, and a significant breach of trust. The only available conclusion is that the applicant was motivated by the prospect of financial gain.

9. As Hidden AJ has pointed out at [50], the community as a whole has a direct interest in maintaining the integrity of the scheme of compulsory third party insurance. That interest stems from the community’s contribution to the scheme, in the form of payment of insurance premiums. Obviously, offending of this nature has the clear potential to cause such premiums to rise, thereby placing an unwarranted financial imposition on all of those who own a motor vehicle. In those circumstances, the applicant’s offending must be viewed as constituting a fraud on the broader community. It is not necessary, in order to determine the objective seriousness of the offending, to place it at a point within a notional range. Having regard to the matters to which I have referred, her Honour’s description of the offending as representing a “sustained period of deception involving a sophisticated scheme” was, in my view, entirely apt, and clearly encompassed an assessment of its objective seriousness. General deterrence and denunciation are necessarily important considerations in determining an appropriate sentence.

10. It is also important to bear in mind that the applicant has asked that no less than 10 Form 1 charges be taken into account on sentence, all of which are similar in nature to the offending in Counts 1 to 6. In these circumstances, I am unable to accept that personal deterrence has no role to play in determining an appropriate sentence. On the contrary, the Court must take the Form 1 matters into account by giving greater weight to the need for personal deterrence and the community’s entitlement to extract retribution for serious offending, and must do so with a view to increasing the penalty that would otherwise be appropriate: Attorney-General’s Application under s 37 of the Crimes (Sentencing Procedure) Act 1999 No 1 of 2002 (2002) 56 NSWLR 146; [2002] NSWCCA 51 at [62]-[65] per Spigelman CJ.

11. In terms of the applicant’s subjective case, I accept that he is a person of no prior convictions. However, the mitigating effect of that factor is lessened in circumstances where he has engaged in the commission of a large number of offences over a long period of time: R v Smith [2000] NSWCCA 140 at [20]-[22].

12. I accept that the applicant pleaded guilty at the first available opportunity, that he is remorseful, and that he has favourable prospects of rehabilitation. I also accept that he has rendered considerable assistance, a fact which is appropriately reflected in the discount calculated by her Honour. Whilst a psychological report tendered before her Honour suggested that the applicant’s capacity for rational decision making may have been compromised at the time of the offending, her Honour concluded that there was no causal connection between the offending and the applicant’s mental state. That conclusion was open to her Honour, and is one with which I agree.

13. Even giving full weight to the applicant’s subjective case, there must be reasonable proportionality between any sentence imposed, and the gravity of the particular offending. An offender's subjective case, however powerful, must not be permitted to result in the imposition of a sentence which fails to reflect that gravity. Any further observation about the gravity of the applicant’s offending would be superfluous. But for his assistance, which was obviously significant, I would not regard his subjective case as particularly powerful in any event.

14. For all of these reasons, it is my respectful view that the order which is proposed, built into which there is a significant element of leniency, is at odds with the objective seriousness of the offending, the need for general deterrence, and the need for personal deterrence arising out of the necessity to take into account the Form 1 offences. I have come to that conclusion mindful of the fact that the applicant has already spent more than 12 months in full time custody.

15. As this is a dissenting judgment, it is not necessary for me to expand any further on these matters, and it is not appropriate that I indicate the sentence that I would have imposed on the applicant in the fresh exercise of the sentencing discretion.

16. HIDDEN AJ: The applicant, Mohammad Edelbi, pleaded guilty in the District Court to an indictment containing 11 counts charging involvement in a systematic pattern of dishonesty, as follows:

• Count 1: participating in a criminal group, an offence contrary to s 93T(1) of the Crimes Act 1900 (NSW), carrying a maximum sentence of 5 years’ imprisonment;

• Counts 2-6: dishonestly making, or concurring in making, a statement that is false or misleading in a material particular, with the intention of obtaining a financial advantage, an offence under s 192G(b) of the Crimes Act, also carrying a maximum sentence of 5 years’ imprisonment;

• Counts 7-11: dishonestly obtaining a financial advantage by deception, an offence under s 192E(1)(b) of the Crimes Act, carrying a maximum sentence of 10 years’ imprisonment.

17. The sentencing judge imposed an aggregate sentence of imprisonment for 3 years with a non-parole period of 2 years. In fixing the indicative sentence for Count 10, her Honour took into account on a Form 1 ten further offences of dishonestly making, or concurring in making, a false or misleading statement with intent to obtain financial advantage under s 192G(b) of the Crimes Act.

18. The indicative sentences were as follows:

• Count 1: 1 year and 4 months;

• Counts 2, 5, 6, 8 and 9: 6 months;

• Counts 3, 4, 7 and 11: 12 months;

• Count 10 (Form 1): 2 years.

19. The applicant seeks leave to appeal against the aggregate sentence.

Facts

20. The sentencing judge summarised the facts in some detail in her reasons for sentence and, particularly in the light of one of the grounds of this application, it is necessary to set out that summary in full:

“By way of background, prior to his association with the offender, Mr Mohammad Sallam worked for Insurance Australia Group CTP claims department as a health recovery consultant between November 2011 and May 2014. This role required Mr Sallam to review invoices submitted by providers for goods and services associated with CTP claims. In May 2014 Mr Sallam's employment was terminated when it was discovered he had used his position to cause fraudulent payments, with a total value of $299,809 to be paid to various fictitious physiotherapy providers.

On 9 March 2016 Mr Sallam was convicted of seven offences committed between July 2011 and October 2013 and was sentenced to concurrent terms of imprisonment of two years to be served by way of an intensive correction order in the community with a three year good behaviour bond under s 9 of the Crimes (Sentencing Procedure) Act expiring on 8 March 2019.

Mr Sallam and Ms Jihan Lazki incorporated Physio Rehab Centre Pty Limited on 10 December 2014 with themselves as sole shareholders and directors. The offender worked for Physio Rehab Centre, as it was known, as its account manager. On 27 May 2015 Mr Sallam resigned as director and the offender replaced him. However, Mr Sallam still had a role in the business after this point. Ms Lazki resigned as director on 1 March 2016 when she received the sum of $150,000 from the offender for the sale of her shareholding leaving the offender as sole director and shareholder. The offender is also the sole director and shareholder of Physio Rehab Centre, Bankstown which was incorporated on 1 April 2016 when the business was expanded to a second clinic.

Police conducted inquiries into Physio Rehab Centre and obtained evidence the operators, that is Mr Sallam, Ms Lazki and the offender were involved in fraudulent practices that were designed to obtain financial advantage.

The activities of the group related to processing of claims against compulsory third party insurers under the provisions of the Motor Accidents Compensation Act 1999. Most of the claimants who were patients of Physio Rehab Centre were clients of Thomas Booler Lawyers of Auburn.

As to Count 1, knowingly participate in the activities of a criminal group,

The criminal group for the purposes of this count included Mr Sallam and the offender, Ms Jihan Lazki and Mr Salem Sawda. Ms Lazki was a registered physiotherapist and founding co-director of Physio Rehab Centre until March 2016. She would create a large number of appointments, treatment notes and invoices including false appointments, treatment notes and invoices.

The offender was responsible for managing the invoices, income, bookkeeping and finances of the business. The offender maintained close control over invoicing within Physio Rehab Centre. He directed receptionists to create appointments and invoices but reviewed and sent off all invoices himself. The offender was responsible for then receiving and depositing all incoming cheques.

Physio Rehab had clinics set up in two locations. The primary clinic in Bankstown was leased from January 2015 and the secondary clinic in Auburn was leased from February 2016.

The criminal group also employed a practice of using non-registered practitioners for treatment while invoicing the treatment under the name of a registered practitioner, most commonly Ms Lazki, when submitting invoices for payment. This was intended to ensure payment because it was a requirement of CTP Insurers that treatment be provided by registered practitioners.

Practitioner swapping is identifiable in the business records (Cliniko data) where the practitioner recorded on the appointment record is not the same as the practitioner recorded on the invoice record.

Physio Rehab Centre used the practice management software, Cliniko, to track appointments and record practitioner treatment notes.

Appointments were created in Cliniko in advance by receptionists such that practitioners could see their scheduled appointments for the day, treat patients and record their notes accordingly. Practitioners did not provide treatment without an existing Cliniko appointment and did not keep alternative records.

Ordinarily, invoices sent to insurers were legally obliged to be paid, to cover the costs of ongoing treatment of an insurance claimant. The offender created or directed others at Physio Rehab Centre to create back-dated appointments on Cliniko that had not occurred. Corresponding invoices would be generated and sent to the relevant insurer for payment of services not rendered.

In cases where treatment was not approved or funded by the insurer, the offender would send invoices for services not rendered to Thomas Booler Lawyers. The invoices were sent seeking payment, which could be made from the client's funds on settlement of their claims.

Coming now to the remaining counts on the Indictment.

It is agreed that the counts on the Indictment are representative counts. They reflect a continuing course of conduct between the period April 2015 to 26 January 2017.

Counts 2 to 6 are counts of dishonestly making or concurring in making a statement that was false or misleading in a material particular with the intention of obtaining a financial advantage.

As to Count 2

Between 19 August 2015 and 15 June 2016 the offender created or caused to be created a Physio Rehab Centre account statement in the name of Mr Tha'er Lawabnih. This account statement was false in that it included 19 invoice items for physiotherapy services not rendered. The offender sent the account to Thomas Booler Lawyers the same date seeking payment of the account, including payment of the 19 false invoices totalling $2240.

Eight of the invoices and underlying back-dated appointments, were created by the offender on 22 March 2016 and 14 June 2016. The other 11 invoices were created under the offender's direction on 10 September and 25 November 2015 from back-dated appointments created by Mr Sallam on 20 August 2015.

As to Count 3

Between 13 June 2016 and 25 September 2016, the offender created or caused to be created a Physio Rehab Centre account statement in the name of llham Shmonka. This account statement was false in that included 29 invoice items for physiotherapy services not rendered. The offender sent the account statement to Thomas Booler Lawyers the same date seeking payment of the account, including payment of the 29 false invoices totalling $4,080.

Two of the invoices were created by the offender on 1 July 2016. Twenty seven of the invoices were created under the offender's direction on 30 June 2016. Nine of the underlying back-dated appointments were created by the offender on 14 and 15 June 2016 and 1 July 2016. The other 20 back-dated appointments were created under the offender's direction on 30 June 2016.

As to Count 4

Between 1 June 2016 and 26 October 2016, the offender created or caused to be created a Physio Rehab Centre account in the name of Mr Bandar Zarqa. This account statement was false in that it included 32 invoice items for physiotherapy services not rendered. The offender sent the account statement to Thomas Booler Lawyers the same date seeking payment of the account, including payment of the 32 false invoices totalling $4,500. The 32 invoices and underlying back-dated appointments were created under the offender's direction on 31 May 2016.

As to Count 5

Between 17 January 2017 and 20 January 2017, the offender created or caused to be created a Physio Rehab Centre account statement in the name of Mr Ali Khodr. This account statement was false in that it included 16 invoice items for physiotherapy services not rendered. The offender sent the account statement to Thomas Booler Lawyers the same date seeking payment of the account including payment of the 16 false invoices totalling $2240.

The 16 invoices and underlying back-dated appointments were created under the offender's direction on 18 January 2017.

As to Count 6

Between 25 September 2015 and 3 May 2017, the offender created or caused to be created a Physio Rehab Centre account statement in the name of Mr Hany Attia. This account statement was false in that it included 16 invoice items for physiotherapy services not rendered. The offender sent the account statement to Thomas Booler Lawyers the same date seeking payment of the account including payment of the 16 false invoices totalling $2240. The 16 underlying back-dated appointments were created by the offender on 26 September 2015. The 16 invoices were created under the offender's direction on 2 May 2017.

Counts 7 to 11 are counts of dishonestly obtaining a financial advantage by deception.

As to Count 7

Between 17 January 2016 and 24 January 2016, the offender created nine back-dated fictitious appointment records for treatment purportedly provided by practitioner, Ms Lazki, to patient Mohammad Abdul Rahman Wraide. The offender subsequently created fraudulent invoices to the total value of $1,080 for these appointments and submitted to QBE Insurance Australia Limited for payment. QBE Insurance paid the full amount of the fraudulent invoices, $1,080 to Physio Rehab Centre by cheque issued 23 January 2016.

As to Count 8

Between 9 May 2016 and 12 May 2016, under the offender's direction, five back-dated fictitious appointment records were created for treatment purportedly provided by practitioner, Ms Lazki, to patient Elissa Reissi. Fraudulent invoices with a total value of $700 were subsequently created for these appointments and submitted to Suncorp Group Limited for payment on 10 May 2016. Suncorp Group Limited partially paid the fraudulent invoices at a rate of $115.60 each, $578 in total, to Physio Rehab Centre on 11 May 2016.

As to Count 9

Between 9 May 2016 and 12 May 2016, under the offender's direction, 12 back-dated fictitious appointment records were created for treatment purportedly provided by practitioner, Ms Lazki, to patient Mohammad Anfur Rahman. Fraudulent invoices, total value of $1700, were subsequently created for these appointments and submitted to Zurich Australian Insurance Limited for payment on 11 May 2016. Zurich Australian Insurance Limited partially paid the fraudulent invoices, $975 in total to Physio Rehab Centre.

As to Count 10

Between 28 July 2016 and 6 January 2017, under the offender's direction, eight back-dated fictitious appointment records were created for treatment purportedly provided by practitioner, Ms Lazki, to patient Mohammad Moussa. Fraudulent invoices with a total value of $1120 were subsequently created for these appointments and submitted to Suncorp Group Limited for payment on 1 January 2017. Suncorp Group Limited paid the full amount of the fraudulent invoices, $1120 in total to Physio Rehab Centre by cheque issued 5 January 2017.

As to Count 11

Between 16 February 2017 and 1 March 2017, the offender created four back-dated fictitious appointment records for treatment purportedly provided by practitioner Mengjie Liu to a patient Milica Dragicevic. On 20 February 2017 under the offender's direction, a further three similarly back-dated appointment records were created. Fraudulent invoices with a total value of $1,027 50 were subsequently created for these appointments and submitted to Suncorp Group Limited for payment on 17 and 21 February 2017. Suncorp Group Limited paid the full amount of the fraudulent invoices, $1,027.50 in total, to Physio Rehab Centre by cheque issued 22 and 28 February 2017.

As to the ten Form 1 matters, they are all charges of making or concurring in making a statement which was false or misleading in a material particular with the intention of obtaining a financial advantage.

The practice was similar to that set out in Counts 1 to 6. The details of each charge are set out in the agreed facts.

On 9 May 2017 police executed simultaneous search warrants at the Bankstown and Auburn premises of Physio Rehab Centre, seizing a significant volume of hard copy and electronic business records.

The offender was arrested at the Physio Rehab Centre office in Bankstown at 11.55am on 17 September 2017. He was conveyed to Bankstown Police Station where he was introduced to the custody manager and advised of his rights under Part 9 of the Law Enforcement (Powers and Responsibilities) Act 2002. After speaking to his lawyer, the offender declined to participate in an electronically recorded interview, which of course is his right.”

21. It will be seen that Counts 2-6, together with the ten charges on the Form 1, offences of making a false or misleading statement with intent, relate to false invoices sent to the solicitors, Thomas Booler Lawyers. Counts 7-10, offences of dishonestly obtaining a financial advantage by deception, relate to false invoices sent to insurers. Count 1, participating in a criminal group, embraces the whole of the fraudulent activity.

22. Her Honour saw the offences as representing “a sustained period of deception which involved a sophisticated scheme”. She set out the factors which she saw as relevant to the assessment of the objective gravity of each offence, as follows:

1. the amount of money involved. She noted the range of amounts between Counts 2 and 11 which, together with the offences on the Form 1, totalled $48,060. Of that sum $33,000 was actually obtained;

2. the significant period of time over which the offences were committed, about 2 years;

3. the offender’s motivation, which must have been for financial gain for himself or others, although it was not clear how much, if any, he actually obtained;

4. the considerable planning and sophistication of the scheme, involving “a significant breach of trust by the offender in the performance of his duties as sole director of the company”. She noted that “each of the representative counts” involved the creation of significant numbers of false invoices.

23. Her Honour continued:

“Society expects that those engaged in provision of health services will conduct their business appropriately and not abuse the trust placed in them. Making claims for services not provided is obviously a serious fraud committed on the community. General deterrence is particularly important in these circumstances.

Count 1 and the course of conduct represented by the counts on the indictment and the Form 1 matters fall at around the mid-range of objective gravity for offences of this kind.”

Subjective case

24. The applicant was aged between 28 and 30 years over the course of the offences. He was 33 when sentenced and is now 34. He had no previous convictions, although her Honour noted that, given his continued undetected offending over a 2 year period, the leniency which that might afford him “diminishes over time”.

25. From two reports of a psychologist it emerged that he came from a supportive family, one of six children, all of whom achieved tertiary education. He completed a science degree but worked as a bookkeeper and in business management. Her Honour noted that these convictions would mean that many employment opportunities would be lost to him, “including obtaining licences of tax, or a BAS agent”.

26. He had a history of mental health issues, originating at the age of 5 in distressing circumstances which need not be set out. There were further difficulties due to the stress of study in later high school and university, and again in 2014 due to the termination of a relationship of which his family did not approve.

27. One of the psychological reports suggested that in the circumstances at the time of the offences, his capacity for rational decision making may have deteriorated. However, given what she described as the sophisticated and sustained nature of his fraudulent behaviour, her Honour did not accept that there was a causal connection between his mental state and his offending such as to reduce his moral culpability.

28. A sentencing assessment report conveyed that the applicant lacked insight into the seriousness of his offending and tended to minimise his role in it. However, on the basis of the psychological reports and a number of character references, her Honour accepted that he was “genuinely sorry for his actions”. She was fortified in that finding by material revealing significant assistance to the authorities, including an undertaking to give evidence in other proceedings. She concluded, particularly in the light of the family support available to him, that he had good prospects of rehabilitation.

29. For the applicant’s pleas of guilty and assistance to the authorities, her Honour allowed a total discount of sentence of 45%: 20% for the utilitarian value of the pleas, and 25% for the assistance to the authorities. Her Honour also took into account the more onerous conditions of custody at the time because of the Covid-19 pandemic.

30. Finally, her Honour found special circumstances because the applicant faced his first period in custody and, particularly in the light of his psychological issues, would benefit from a lengthy period of supervision on parole to assist his reintegration into society.

The application

31. The application for leave to appeal is brought on four grounds:

1. When imposing a sentence of full time imprisonment, her Honour failed to have regard to the requirements of s 66 Crimes (Sentencing Procedure) Act 1999;

2. her Honour erred in finding that the offences “involved a significant breach of trust by the offender in the performance of his duties as sole director of the company”;

3. her Honour failed to assess adequately or appropriately the objective seriousness of counts 2-11; and

4. alternatively, her Honour erred in concluding that the objective seriousness of offences 2-11 fell within the mid-range.

32. It is convenient to deal with the grounds in reverse order because the resolution of grounds 2-4 may bear upon consideration of the first and major ground, which relates to the availability of an intensive correction order.

Grounds 3 and 4: assessment of objective seriousness of Counts 2-11

33. These two grounds can be dealt with together. They complain, in the alternative, that her Honour failed appropriately to assess the gravity of the individual counts or, if she did assess each of them as falling within the mid-range, that assessment was not open. The grounds arise from her Honour’s finding, quoted at [23] above, that Count 1 and the course of conduct represented by the counts on the indictment and the Form 1 matters “fall at around the mid-range of objective gravity for offences of this kind”.

34. As to ground 3, Mr Game SC, who appeared with Mr Lange for the applicant, submitted that it is apparent from this passage that her Honour made a “global assessment” of the criminality of the offences, rather than assessing the objective seriousness of each offence individually. He referred to Franklin v R [2016] NSWCCA 319, a case involving a substantial aggregate sentence for a large number of sexual offences committed by that applicant upon his niece over a period of several years. The sentencing judge’s assessment of the seriousness of the offences was undoubtedly expressed in global terms. At [65] RA Hulme J, with whom Macfarlan JA and Bellew J agreed, said:

“It was a necessary function of his Honour's sentencing task to make some finding as to the gravity of the individual offences: see, for example, Mulato v R at [47]; JM v R [2014] NSWCCA 297; 246 A Crim R 528 at [39](4); R v Van Ryn [2016] NSWCCA 1 at [133]-[142]. It may be inferred from the indicative sentences that it is a task with which there must have been some intellectual engagement. The problem is that the judge exposed no reasoning on the subject. Lest it be thought that in a case involving sentencing for a large number of offences that would involve an onerous recitation of lengthy and elaborate reasons, it need not. The indicative sentences suggest that the judge must have found a lot of the offences fell within a broadly similar range with a few outliers. If that was his assessment, it could have been stated fairly succinctly.”

35. Mr Game submitted that here the objective gravity of each offence individually should have been assessed, as required by Pearce v The Queen (1998) 194 CLR 610. He acknowledged that the fact that the offences were committed as part of a course of conduct was relevant to the assessment of the gravity of the individual offences, but said that that does not detract from the requirement to assess each offence individually.

36. However, as the Crown prosecutor pointed out, the passage complained of in these grounds should not be read in isolation from what her Honour had said earlier about objective gravity. As noted at [22] above, her Honour set out what she saw as the factors relevant to the assessment of the objective gravity of “each offence”, referring to the period of time over which the offences were committed, the applicant’s motivation and the planning and sophistication of the scheme, as well as the amounts of money involved in Counts 2-11. Apart from the amounts involved, those features were common to all of the offences and, as noted, each of them stood to be assessed as part of a continuing pattern of offending.

37. It is well established that her Honour was not required to assess the gravity of the offences by assigning them to a place within a notional scale but, rather, to identify the “facts, matters and circumstances” bearing upon that assessment: FL v R [2020] NSWCCA 114, per Wilson J (with whom RA Hulme and Hamill JJ agreed) at [59]-[60], citing Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39 at [29]. This her Honour did.

38. It is apparent that, in the course of doing so, her Honour had regard to the relative seriousness of each of the offences. As to Counts 2-6, the offences involving invoices to the lawyers, her Honour specified indicative sentences of 6 months for each of Counts 2, 5 and 6, each of which involved the same amount ($2,240) and a comparable number of invoice items. She specified indicative sentences of 12 months for each of Counts 3 and 4, each involving an amount in excess of $4,000 with significantly larger, but again comparable, numbers of invoice items.

39. As to Counts 7-11, involving the insurers, Count 10 stands apart because in determining the indicative sentence of 2 years for it, her Honour took into account the ten offences on the Form 1. The other four counts involved comparable numbers of fictitious appointment records and were distinguished primarily by the amounts involved. Her Honour specified indicative sentences of 12 months for each of Counts 7 and 11, involving claims of a little over $1,000, which were paid in full. She specified indicative sentences of 6 months for each of Counts 8 and 9. Count 8 involved a claim for $700, of which $578 was paid. Count 9 involved a claim for $1,700, of which $975 was paid.

40. In the circumstances of the case, it cannot be said that the features of each of these offences demanded a greater differentiation in the indicative sentences.

41. As to ground 4, Mr Game submitted that, in any event, it was not open to her Honour to have found each of Counts 2-11 to fall within the mid-range of objective gravity. In pursuing this ground, he acknowledged established authority that the assessment of objective seriousness is an evaluative exercise for the sentencing judge, one in which this Court would be slow to intervene: Mulato v R [2006] NSWCCA 282, per Spigelman CJ at [37] and Simpson J (as she then was) at [46].

42. Nevertheless, Mr Game submitted that her Honour had fallen into error here. While acknowledging that the amount involved in an offence of dishonesty is not determinative of its objective gravity, he cited the example of Count 8, a claim on an insurer for $700 leading to a payment of $578. He observed that the offence under s 192(E) of the Crimes Act embraces “unlimited sums”, and he noted the limited period over which this particular offence occurred, from 9 to 10 May 2016. He submitted that it was not open to her Honour to conclude that that offence fell within the mid-range and that the same could be said of the other counts, even though they were objectively more serious.

43. Mr Game suggested an incongruity between a finding of mid-range and the modest indicative sentences in respect of these counts, for the most part 6 or 12 months. However, it is to be borne in mind that the indicative sentences were arrived at after a combined discount of 45%. It is also to be noted, as the Crown prosecutor pointed out, that her Honour did not place the offences squarely at the mid-range but, rather, “at around the mid-range”. That expression was presumably intended to embrace some flexibility in the assessment of objective gravity, and is consistent with the variation in the indicative sentences. As the Crown prosecutor fairly pointed out, the differences in the amounts involved in the various counts were significant, but not substantial. Moreover, in assessing the objective gravity of each count, her Honour properly had regard to the features common to all of them: the applicant’s motivation and the persistence and sophistication of the enterprise.

44. I am not persuaded that her Honour fell into error in nominating the range she did.

Ground 2: breach of trust?

45. As noted above at [22], her Honour characterised the offences as “a significant breach of trust by the offender in the performance of his duties as sole director of the company”. Mr Game submitted that a finding of breach of trust was not open. He referred to the examination of the concept of breach of trust in sentencing by Hulme J in R v Stanbouli [2003] NSWCCA 355; (2003) 141 A Crim R 531, at [34] (539):

“The cases where, traditionally, breach of trust has been regarded as exacerbating criminality are where it is the victim of the offence who has imposed that trust – an employer defrauded by his employee, a solicitor who appropriates trust funds to his own use - or where the criminality involves a breach of that which the offender was engaged or undertook to do, e.g. a teacher or baby-sitter who indecently deals with the subject of his or her charge. Another example is afforded by the case of R v McLean (unreported, CCA, 31 March 1989) where a customs officer employed in the investigations section of the department had conspired to import heroin and cannabis. The offence there was in direct contravention of what the offender had been employed to do.”

46. Breach of trust or authority in relation to the victim is an aggravating circumstance in s 21A(2)(k) of the Crimes (Sentencing Procedure) Act. In relation to that provision Howie J, with whom McClellan CJ at CL and Hislop J agreed, said in Suleman v R [2009] NSWCCA 70 at [22] and [25]:

“22.   This aggravating factor is not made out simply because the victim trusted the offender for some reason or other, such as because of the offender’s standing in the community or he appeared to be a successful businessman. Nor is it made out because the persons with whom the offender dealt were “commercially naïve people”. The relevant factor is that there was at the time of the offending a particular relationship between the offender and the victim that amounted to “a position of trust”. It is a special relationship existing between them and transcends the usual duty of care arising between persons in the community in their everyday contact or their business and social dealings….

…

25.   But the common law does not recognise, for the purposes of sentencing, that a position of trust arises simply because the two persons are involved in a commercial relationship. There must be some peculiar aspect of the relationship that imposed a position of trust on one or both of the participants….”

47. Mr Game noted her Honour’s description of the offending as “the activities of the group related to processing of claims against compulsory third party insurers under the provisions of the Motor Accidents Compensation Act 1999”. As he correctly observed, the deception was perpetrated by the lodgement of claims for treatments which had not been provided or had been provided by persons other than the practitioners named in the claims. Typically this was done through the law firm, of which most of the patients were clients. Mr Game submitted that there was no trust reposed by the compulsory insurers in the practice which the applicant ran. On the contrary, the practice did not have a direct relationship with the insurers, the deception for the most part occurring indirectly through the law firm.

48. However, her Honour’s reference to breach of trust should be understood in the light of what she said thereafter, set out at [23] above, referring to society’s expectation that providers of health services would not abuse the trust placed in them, and adding that making claims for services not provided is “obviously a serious fraud committed on the community”. It is in this sense that I understand her Honour to have used the expression “breach of trust”. Neither Mr Game nor Mr Lange appeared for the applicant in the District Court. However, counsel who did appear acknowledged in written submissions that s 21A(2)(k) “might be relevant insofar as it can be said that health practitioners are expected by the government and public to behave with honesty in relation to matters such as claims of this kind….”

49. In Ridley v R [2008] NSWCCA 324; (2008) 192 A Crim R 139, the applicant had been convicted of a number of offences of dishonesty under Commonwealth legislation arising from false claims for refunds for goods and services tax in activity statements submitted to the Australian Taxation Office. In his reasons for sentence the trial judge held that the offences were a breach of trust, involving fraud on “all members of the community who pay their taxes”. That approach was upheld by this Court. Allsop P (with whom Johnson and Price JJ agreed) noted at [84] evidence of the self-assessment system which had been the relevant taxing regime for some years and which relied on “the honesty of individual taxpayers”. His Honour said at [85]:

“This is in terms a kind of trust. Members of the community rely on each other for honesty for the operation of the tax system. It was a legitimate comment by the primary judge and an entirely legitimate consideration.”

50. So it is here. Members of the community contribute to the provision of compulsory third party insurance and have an interest in the integrity of the system. Whether or not the present case falls within the precise terms of s 21A(2)(k), her Honour’s finding of a breach of trust in this context was open and was appropriate.

Ground 1: failure to consider an intensive correction order

51. The aggregate sentence of 3 years was within the limit allowing for consideration that it be served by way of an intensive correction order: s 68(2) of the Crimes (Sentencing Procedure) Act. The effect of this ground, complaining of a failure to have regard to the requirements of s 66 of that Act, is that her Honour failed appropriately to consider that option.

52. In written submissions in the District Court, counsel then appearing submitted that the offending should be regarded as below mid-range in terms of objective seriousness, and also argued that an overall discount of 45% was appropriate for the applicant’s plea of guilty and his assistance to the authorities. He added that, if those submissions were accepted, “it is suggested that the sentencing range that might be considered would be such as to allow for a sentence to be imposed which could be served in the community”. He noted that a sentencing assessment report which her Honour received conveyed that the applicant would be suitable for release on a “supervised order”.

53. In the course of oral submissions, her Honour raised this matter with the prosecutor, who argued that such an outcome would be inadequate given the seriousness of the offending. Counsel for the applicant made no oral submission about the matter, including in reply, but at the end of submissions her Honour said that she had not come to any final view about it. However, she said that her initial reaction was that service of a sentence in the community was not appropriate and that the applicant should not be under any misapprehension, while adding, “I will carefully consider the matter and, of course, I have to set out my indicative sentences too which will be the decisive fact”.

54. However, in her reasons for sentence her Honour made no reference to the option of an intensive correction order. Towards the end of her reasons, before passing sentence, she did say, “Taking all matters into account, a fulltime custodial sentence is the only appropriate sentence for each count”. Having announced her decision to impose an aggregate sentence, she added that the single non-parole period she would fix “represents the minimum period that the offender should spend in custody having regard to all the elements of punishment, including the objective seriousness of the offence, specific and general deterrence, denunciation and his subjective circumstances”.

55. Intensive correction orders are dealt with in Part 5 of the Crimes (Sentencing Procedure) Act. Section 64 provides that the Part applies “in circumstances in which a court is considering, or has made, an intensive correction order”. Section 66 provides:

66.   Community safety and other considerations

(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.

56. Mr Game submitted that s 66 applied here because her Honour was “considering” an intensive correction order within the meaning of s 64. Thus, he argued, her Honour was bound to consider the issues raised by s 66.

57. Mr Game referred to Blanch v R [2019] NSWCCA 304, in which this Court found that a trial judge was in error in failing appropriately to deal with the issue of an intensive correction order, which had been raised in the proceedings. That applicant had been sentenced for drug supply offences. The sentencing judge made no reference in his reasons to s 66, and, indeed, had not referred in terms to an intensive correction order. What he did say is recorded in [37] of the judgment of Campbell J, with whom Hoeben CJ at CL and Price J agreed. It is sufficient to set out part of the passage in the sentencing judge’s reasons which Campbell J quoted at [37], as follows:

“…No sentence other than imprisonment is appropriate to fulfil the purposes of sentencing in this case.

Although the effective sentence will be such that alternatives to full-time imprisonment would be open, the objective seriousness of the offences and the subjective circumstances of the offender are such that only full-time imprisonment will be appropriate to fulfil the purposes of sentencing, including, particularly, the need for general deterrence, protection of the community and recognition of the harm caused to the community.”

58. At [60] Campbell J said that the findings of the sentencing judge might have justified a decision to impose a sentence of fulltime imprisonment instead of an intensive correction order. His Honour continued at [60]-[61]:

“60 … However, I am also of the view that the circumstance that the whole gravamen of the case presented on behalf of the applicant at first instance was that (a) a sentence of imprisonment was inevitable; but (b) it was appropriate to order that it be served in the community by intensive correction order, required his Honour to direct himself as to the applicable principles, specifically s 66, governing the decision whether to make an ICO. The section, whether he referred to it expressly or only by implication, required him to consider as a paramount consideration the requirements of community safety by reference to which of an ICO or full-time detention would more likely address the offender’s risk of re-offending.

61 His Honour would also have been required to consider the provisions of s 3A and other relevant principles and matters in accordance with s 66(3). He may well have come to the same conclusion adopting the approach required by the statute. But by by-passing, as his Honour appears to have done, the requirements of ss 66(1) and (2), and, in effect, proceeding directly to s 66(3), his Honour has not applied the relevant principles of law which govern the exercise of the statutory power invoked by the applicant’s submissions before him. With great respect to his Honour he did not even refer to an ICO in terms.”

59. Campbell J observed at [62] that the question of an intensive correction order “was squarely raised and seriously put and should have been considered in terms”. He added that, as to s 66, it was “not necessary for his Honour to set out the section, or to refer to it in express terms, but as his reasons made clear his Honour did not direct himself in substance by reference to the principles it establishes which govern the decision whether to make an ICO”.

60. At [68] his Honour stressed that he was not suggesting that it was necessary for a sentencing judge to go through this process “in every case in which a short sentence of imprisonment is under consideration for an offence” for which an ICO might be available (referring to s 67, which excludes that sentencing option in relation to certain offences).

61. Citing the judgment of Basten JA in R v Fangaloka [2019] NSWCCA 173 at [60], his Honour said that there “must be some relevant material, which could include a cogent argument advanced by counsel, before the court to engage a requirement to consider the matter”. As to the case at hand, his Honour said at [69]:

“What enlivened the necessity for his Honour to consider, and in the event explain if he was not persuaded, specifically, that an ICO was appropriate was the argument put by counsel. If the argument was to be rejected, his Honour was required to deal with the matter in accordance with the statutory stipulations governing the power to make such an order.”

62. Mr Game referred to the affirmation of Campbell J’s reasoning by McCallum JA, with whom Meagher JA and Simpson AJA agreed, in Wany v DPP [2020] NSWCA 318, a case of judicial review of the decision of a District Court judge in an appeal against a sentence imposed by a magistrate. At [52], after referring to the judgment of Campbell J in Blanch at [68]-[69], her Honour said that “the obligation to consider making an ICO may be enlivened (as a requirement of practical justice if not a matter of legal duty) where a cogent argument is advanced for taking that course”. She added that there would be “cases in which it will be open to the sentencing judge to reject such an argument without adjourning the proceedings to obtain a sentencing assessment report”. As to s 66, her Honour said at [60]:

“… That section provides that, where the court is considering an ICO, the paramount (mandatory) consideration is community safety; in considering that issue, the sentencing court is required by s 66(2) to make an assessment as to ‘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’.”

63. At [61], her Honour referred to “a separate controversy” as to the proper construction of that section, but added that “on any view, it requires the sentencing magistrate or judge to form a view as to which method of serving the sentence of imprisonment (by ICO or in detention) is more likely to address an offender’s risk of re-offending”. The controversy to which her Honour referred relates to the provision in s 66(3) that, in deciding whether to make an intensive correction order, a court must also consider the provisions of s 3A (relating to the purposes of sentencing) “and any relevant common law sentencing principles….”

64. In Blanch Campbell J referred to the same controversy at [52]. Neither he nor McCallum J found it necessary to resolve that issue; nor is it here. The difference of opinion relates to what might be termed the more restrictive view of s 66 espoused by Basten JA in Fangaloka at [63]ff and the more liberal view of the section expressed by Beech-Jones J in Cassella v R [2019] NSWCCA 201 at [107]-[108]. Recently, in Mandranis v R [2021] NSWCCA 97, Simpson AJA, with whom Garling and N Adams JJ agreed, favoured the more liberal approach.

65. Mr Game argued that there was significant material in the applicant’s subjective case to call for the examination of the option of an intensive correction order, particularly his remorse, not only expressed but demonstrated by his assistance to the authorities. Mr Game also noted the sentencing assessment report, referred to above, which conveyed the applicant’s suitability for “a period of imprisonment by way of intensive correction”.

66. In response, the Crown prosecutor noted that the submission of counsel for the applicant in the District Court was expressed to be contingent upon a finding that the objective seriousness of the offending was below mid-range. (She also observed that the submission did not refer to an intensive correction order in terms. However, it is clear that what was at issue was the service of a term of imprisonment in the community, which could not have been anything else.) The Crown prosecutor also observed that that option had been the subject of only brief reference in the written submissions and counsel for the applicant had not addressed it at all in oral argument, even after her Honour had raised it with the prosecutor. She submitted that the issue could not be said to have been “squarely raised” or the subject of “cogent argument”, contrasting the present case with Blanch and Wany, in which the issue had been front and centre.

67. Generally, the Crown prosecutor questioned whether the applicant’s favourable subjective case fairly raised the issue of an ICO, noting the observation of Fullerton J in Karout v R [2019] NSWCCA 253 at [94] that, in relation to that applicant, his good prospects of rehabilitation and a finding that he was unlikely to reoffend “did not dictate that an ICO was the appropriate sentencing outcome”.

68. This ground has troubled me, and I acknowledge the force of the Crown prosecutor’s submissions. However, I have decided that the ground is made out.

69. What cannot be denied is that the option of service of a prison term in the community was raised in written submissions on behalf of the applicant. True it is that the submission was made on the basis that the objective seriousness of the offending should be regarded as “below mid-range”. Her Honour found it to be “around mid-range”. Both expressions are inherently imprecise, and there is not necessarily a marked difference between them. (Indeed, debates such as this call into question the utility of reference to ranges generally.)

70. I do not see it as significant that in oral submissions counsel for the applicant did not address the issue, given that it had been raised succinctly and clearly in the written submissions. Nor do I see it as significant that counsel said nothing more about it in oral submissions after the Crown prosecutor expressed his opposition to it. This meant no more than that, as would be expected, issue had been joined between the parties about the matter. Most importantly, her Honour expressly undertook to give it careful consideration.

71. In the event, in her reasons for sentence her Honour did not deal with the issue, addressing the considerations raised by s 66, in accordance with the approach enshrined in Blanch and Wany. It should be observed that she was not referred to Blanch, and Wany was decided after this sentence was passed. Of course, it would have been open to her Honour, having assessed those matters, to decide that fulltime imprisonment was inevitable. Nevertheless, the case was one in which an ICO was worthy of consideration, and in failing to address it in accordance with those authorities, she was in error.

72. Accordingly, it falls to this Court to consider the appropriate sentence in the exercise of its own discretion.

Resentence

73. The sentence passed by her Honour commenced on the day it was imposed, 12 May 2020. Accordingly, the applicant has now served (in round figures) 13 months of fulltime imprisonment. That, of course, is a matter to be taken into account on the issue of resentence.

74. The Crown prosecutor submitted that, if error were established, this is a case where no lesser sentence than the fulltime imprisonment her Honour imposed was warranted. However, after careful consideration, I am of the view that this Court should resentence. While I do not perceive any need to express the objective gravity of the offences by reference to a range, they are undoubtedly serious for the reasons identified by her Honour, summarised at [22] above. Sentence for them must appropriately reflect retribution and deterrence, both general and specific (although it is clear that specific deterrence plays a lesser role here).

75. It is not in issue that they merit a sentence of imprisonment, and I consider that the aggregate term of 3 years set by her Honour is the appropriate sentence. Like her Honour, I would allow a combined discount of 45% for the applicant’s pleas of guilty and his assistance to the authorities, and I would adopt the indicative sentences set by her Honour. However, I have concluded that the aggregate sentence should be served by way of intensive correction in the community.

76. The applicant has already served a significant period of fulltime imprisonment. I have regard to his favourable subjective case, particularly his good prospects of rehabilitation, his remorse and his assistance to the authorities. Of course, that assistance has been taken into account in arriving at the sentence, but it also demonstrates his remorse and his rehabilitation prospects. I also note that at the end of both reports, the psychologist, Dr Milic, recommended that he continue with psychological treatment over the next 12 months.

77. Having regard to s 66(2), it is my assessment that the applicant’s risk of reoffending is more likely addressed by an ICO. Accepting the paramountcy of community safety in accordance with subs (1), and having regard to the other sentencing factors embraced by subs (3), I consider that this is an appropriate case for that course.

78. There are to be found in the authorities two approaches to how this Court, having decided to intervene and impose an ICO, should take into account a period of fulltime custody which the applicant had already served. Section 70 of the Crimes (Sentencing Procedure) Act provides that the term of an ICO is “the same as the term or terms of imprisonment in respect of which the order is made”, and s 70(1) provides that an ICO commences on the date on which it is made.

79. In Blanch, at [91]ff, Campbell J examined those provisions, together with s 47 of the Crimes (Sentencing Procedure) Act and s 5 of the Criminal Appeal Act 1912 (NSW), and concluded that this Court could backdate the ICO to the date of commencement of the sentence in the District Court, so as to embrace the period which had been served. However, in Mandranis, Simpson AJA, at [56]ff, decided that the effect of ss 70 and 71 is that an ICO made by this Court must date from the day on which it is made, but the sentence could be reduced to take account of the period of fulltime custody served. That was the course taken in that case.

80. It appears that in Mandranis the Court was not referred to Blanch. However, I respectfully share the view of Simpson AJA, particularly in the light of the requirement in s 70 that the term of the ICO be the same as the term of imprisonment in respect of which it is made. I propose to adopt her Honour’s approach in Mandranis.

81. Accordingly, I would reduce the 3 year aggregate sentence by 13 months and impose a term of 1 year and 11 months, to be served by way of an ICO. The material before her Honour, including the sentencing assessment report, provides sufficient material for that purpose, and no further report is required. Apart from the standard conditions under s 73 of the Crimes (Sentencing Procedure) Act, I would impose an additional condition that the applicant receive any psychological treatment recommended to him: s 73A(2)(e).

Orders

82. I would grant leave to appeal and allow the appeal. I would quash the sentence passed in the District Court and, in lieu, would sentence the applicant to imprisonment for 1 year and 11 months to be served by way of intensive correction in the community, commencing on 16 June 2021 and expiring on 15 May 2023. That order would be subject to the following conditions:

1. the applicant must not commit any offence;

2. the applicant must submit to supervision by a community corrections officer;

3. the applicant must receive any psychological treatment recommended to him.

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Decision last updated: 16 June 2021