R v Hausman; Hausman v R; R v Rostankovski; Rostankovski v R

[2022] NSWCCA 24

Court of Criminal Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

R v Hausman; Hausman v R; R v Rostankovski; Rostankovski v R [2022] NSWCCA 24

Hearing dates:

1 October 2021

Date of orders:

14 February 2022

Decision date:

14 February 2022

Before:

Fullerton J at [1]
Adamson J at [210]
Hamill J at [219]

Decision:

R v Rostankovski

1. The Director’s appeal against the sentence imposed on Mr Rostankovski be dismissed.

R v Hausman

1. The Director’s appeal against the sentence imposed on Mr Hausman be dismissed except to vary the sentencing order made by Abadee DCJ on 1 April 2021 in the following limited respect:

I am required pursuant to s 16AC of the Crimes Act to set out the period of imprisonment and non-parole period I would have imposed in relation to Count 2 (being the money laundering offence) but for Mr Hausman’s undertaking to assist authorities in the future. Accordingly, but for Mr Hausman’s undertaking (yielding a 20% discount), I would have imposed a period of imprisonment of 12 years imprisonment for Count 2 (being the money laundering offence) with a non-parole period of 7 years. If Mr Hausman does not adhere to his undertaking to assist in the future, the Commonwealth Director of Public Prosecutions may appeal under s 16AC(3) of the Crimes Act (Cth) against the adequacy of the reduced sentence I have imposed.

I am also required to state the penalty that would have been imposed in relation to count 1, the blackmailing offence, but for your assistance. In contrast to the requirements of federal sentencing law, however, the requirement to state the impact of your assistance extends to both the past and the future (s 23(4) of the CSP Act). The discount on this sentence, for past and future assistance, is a combined discount of 25%. That means that but for your past and future assistance, you would have received a sentence of imprisonment on the blackmail offence of 7 years and 6 months with a non-parole period of 4 years and 6 months.

[Variation in bold].

2. In every other respect, the sentence imposed by Abadee DCJ is confirmed.

Hausman v R

On Mr Hausman’s application for leave to appeal the severity of his sentence:

1. Grant leave to appeal.

2. Appeal dismissed.

Rostankovski v R

On Mr Rostankovski’s application for leave to appeal the severity of his sentence:

1. Grant leave to appeal

2. Appeal dismissed.

Catchwords:

CRIME — Crown appeals — whether excessive allowance for totality — reconciling principles of cumulation and concurrency with totality principle —where offenders sentenced to both State and Commonwealth offences — whether sentences manifestly inadequate — Crown appeal against Rostankovksi dismissed — Crown appeal against Hausman allowed in limited respect — sentence which would have been imposed but for past and future assistance to authorities — Hausman resentenced — cross-appeals against severity of sentences — both respondents/cross-applicants convicted of one count of blackmail contrary to s 249K(2) of the Crimes Act (NSW) and one count of laundering the proceeds of the commission of the blackmail offence contrary to ss 400.3(1) and 11.2A(1) of the Criminal Code (Cth) — Rostankovski additionally convicted of one count of aid and abet fraud contrary to ss 135.1(3) and 11.2(1) of the Criminal Code (Cth) — separate sentences and non-parole periods for State and Commonwealth offences — application of s 19(3) of the Crimes Act (Cth) Rostankovski sentenced to imprisonment for 10 years and 5 months with a non-parole period of 7 years and 2 months — Hausman sentenced to imprisonment for 8 years with a non-parole period of 6 years — whether patent errors of sentencing principle required intervention in a resentencing exercise for both cross-applicants — error in dealing with Rostankovski’s prior good character — Crown conceded disparity between Rostankovski’s sentence and Hausman’s sentence for blackmail — no lesser sentence warranted in law — appeals dismissed

Legislation Cited:

Crimes Act 1900 (NSW)

Crimes Act 1914 (Cth)

Crimes (Sentencing Procedure) Act 1999 (NSW)

Criminal Appeal Act 1912 (NSW)

Criminal Code (Cth)

Crimes Legislation Amendment (Sexual Crimes Against Children and Community Protection Measure) Act 2020 (Cth)

Cases Cited:

Blake v R [2021] NSWCCA 258

Bugmy v The Queen (2013) 249 CLR 571; [2013] HCA 37

Cahyadi v R (2007) 168 A Crim R 41; [2007] NSWCCA 1

Chen v R [2010] NSWCCA 224

CMB v Attorney-General (NSW) (2015) 256 CLR 346; [2015] HCA 9

Davis vR [2015] NSWCCA 90

Dickson v R [2016] NSWCCA 105

Director of Public Prosecutions (Cth) v Beattie (2017) 270 A Crim R 556; [2017] NSWCCA 301

Director of Public Prosecutions (NSW) v Abdulrahman [2021] NSWCCA 114

Director of Public Prosecutions (NSW) v Burton [2020] NSWCCA 54

Director of Public Prosecutions (Vic) v Swingler (2017) 269 A Crim R 526; [2017] VSCA 305

Elshani v R (2015) 255 A Crim R 488; [2015] NSWCCA 254

Fasciale v R (2010) 207 A Crim R 488; [2010] VSCA 37

Green v The Queen; Quinn v The Queen (2011) 244 CLR 462; [2011] HCA 49

Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45

Huang v R (2018) 96 NSWLR 743; [2018] NSWCCA 57

Hildebrand v R [2021] NSWCCA 9

Johnson v The Queen [2004] HCA 15

Kentwell v The Queen (2014) 252 CLR 601; [2014] HCA 37

Lowndes v The Queen (1999) 195 CLR 665; [1999] HCA 29

Macallister (A Pseudonym) v R [2020] NSWCCA 306

Manojlovic v R; R v Manojlovic [2020] NSWCCA 315

Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25

McCarthy v R (2011) 206 A Crim R 131

Mill v The Queen (1988) 166 CLR 59; [1988] HCA 70 Obeid v R (2017) 96 NSWLR 155; [2017] NSWCCA 221

O’Grady v R [2015] NSWCCA 16

Parker v Director of Public Prosecutions (1992) 28 NSWLR 282

Pearce v The Queen (1998) 194 CLR 610; [1998] HCA 57

Postiglione v The Queen (1997) 189 CLR 295; [1997] HCA 26

R v Anquetil [2020] NSWSC 995

R v Anthony James Dickson (No 18) [2015] NSWSC 268

R v Dong [2021] NSWCCA 82

R v Faulkner (1972) 56 Cr App R 594

R v Gent [2005] NSWCCA 370; (2005) 162 A Crim R 29

R v Hammond [2020] NSWSC 888

R v Hernando (2002) 136 A Crim R 451; [2002] NSWCCA 489

R v Huang [2007] NSWCCA 259; (2007) 173 A Crim R 370.

R v Issakadis [2018] NSWSC 378

R v Janceski [2005] NSWCCA 288

R v Kennedy [2000] NSWCCA 527

R v Kitson [2019] NSWSC 1109

R v KM [2004] NSWCCA 65

R v Leroy (1984) 2 NSWLR 441

R v Nguyen [2010] NSWCCA 238; (2010) 205 A Crim R 106

R v Rivkin (2004) 59 NSWLR 284; [2004] NSWCCA 7

R v Vo; R v Tran [2006] NSWCCA 165

R v Zerafa (2013) 235 A Crim R 265; [2013] NSWCCA 222

RO v R [2019] NSWCCA 183

Ryan v The Queen (2001) 206 CLR 267; [2001] HCA 60

Sigalla v R [2021] NSWCCA 22

Woods v R [2020] NSWCCA 219

Xiao v R (2018) 96 NSWLR 1; [2018] NSWCCA 4

ZA v R (2017) 267 A Crim R 105; [2017] NSWCCA 132

Texts Cited:

DA Thomas, Principles of Sentencing, 2nd ed (1979)

Category:

Principal judgment

Parties:

The Crown (Appellant / Cross-Respondent)
Daniel Hausman (Respondent / Cross-Applicant)
Daniel Rostankovski (Respondent / Cross-Applicant)

Representation:

Counsel:
S McNaughton SC / G Wright (The Crown)
P English (Hausman)
B Walker SC / T Woods (Rostankovski)

Solicitors:
Commonwealth Director of Public Prosecutions (The Crown)
MacDougall & Hydes (Hausman)
Longton Legal (Rostankovski)

File Number(s):

2017/148647; 2017/148659

 Decision under appeal 

Court or tribunal:

District Court

Date of Decision:

01 April 2021

Before:

Abadee DCJ

File Number(s):

2017/148647; 2017/148659

Judgment

1. FULLERTON J: On 1 April 2021, following their pleas of guilty to offences committed contrary to the Crimes Act 1900 (NSW) and the Criminal Code (Cth), Daniel Rostankovski and Daniel Hausman were sentenced by Abadee DCJ to the following terms of imprisonment:

1. On an indictment containing three counts (one State offence and two Commonwealth offences), Mr Rostankovski was sentenced to imprisonment for 10 years and 5 months with a non-parole period of 7 years and 2 months.

2. On an indictment containing two counts (one State offence and one Commonwealth offence), Mr Hausman was sentenced to imprisonment for 8 years with a non-parole period of 6 years.

2. The charges were laid following an investigation by the Australian Federal Police into a largescale conspiracy involving a number of individuals to commit tax frauds (commonly known as the Plutus tax fraud conspiracy) and a conspiracy to deal with the proceeds of those frauds. Neither of the offenders was charged as a co-conspirator in either conspiracy. However, one of the two Commonwealth offences for which Mr Rostankovski was sentenced was the substantive offence of aiding and abetting Adam Cranston (one of the principal conspirators in the Plutus tax fraud conspiracy) to commit a tax fraud contrary to ss 135.1(3) and 11.2(1) of the Criminal Code (Cth).

3. That offence, referred to for convenience as the “the aid and abet fraud offence” and attracting a maximum term of imprisonment of 5 years, was fully particularised on the indictment as follows:

Count 1: Between about 8 August 2016 and about 1 February 2017 at Sydney in the State of New South Wales and elsewhere, [Mr Rostankovski] did aid, abet, counsel or procure the commission of an offence by Adam Cranston against s 135.1(3) of the Criminal Code (Cth), namely that Adam Cranston engaged in conduct with the intention of dishonestly causing a loss to another person, namely the Commonwealth (contrary to s 135.1(3) with s 11.2 of the Criminal Code).

4. Both offenders were also sentenced for the State offence of blackmail contrary to s 249K(2) of the Crimes Act (NSW). A number of conspirators in the Plutus tax fraud conspiracy, including Adam Cranston, were the victims of that offence.

5. That offence, referred to for convenience as “the blackmail offence” and attracting a maximum term of imprisonment of 14 years, was particularised as follows:

On or about 1 February 2017 and on or about 15 February 2017 at Sydney in the State of New South Wales, did make unwarranted demands with menaces, with intent to obtain a gain by an accusation or a threatened accusation, that Adam Cranston, Jason Onley and Dev Menon had committed serious indictable offences, namely fraud and money laundering (contrary to s 249K(2) of the Crimes Act).

6. Finally, both offenders were also sentenced for the Commonwealth offence of laundering the proceeds of their commission of the blackmail offence contrary to ss 400.3(1) and 11.2A(1) of the Criminal Code (Cth).

7. That offence was referred to for convenience as “the money laundering offence”. It was charged as a joint criminal enterprise that the applicants committed with each other and Sevag Chalabian (a solicitor and principal of the law firm Lands Legal) and particularised as follows:

Between about 1 February 2017 and about 18 May 2017 at Sydney in the State of New South Wales and elsewhere, did jointly commit an offence with [each other] and Sevag Chalabian in that [they] did deal with money that was, and that [they] believed to be, proceeds of crime and at the time of dealing the value of the money was $1,000,000 or more (contrary to s 400.3(1) with s 11.2A(1) of the Criminal Code).

8. It attracted a maximum term of imprisonment of 25 years.

The proceedings on sentence in summary

9. Although Mr Rostankovski and Mr Hausman were jointly charged with the State offence of blackmail and with the Commonwealth offence of money laundering, separate sentence proceedings were convened over consecutive dates in March 2021. Separate sentencing judgments were published on 1 April 2021.

10. The sentencing reasons were structured referable to what the Crown and senior counsel for both Mr Rostankovski and Mr Hausman had identified in their submissions as the provisions under both the State and Commonwealth sentencing regimes that were material to the sentencing exercise. The sentencing regime in Part IB of the Crimes Act 1914 (Cth) governed the sentence to be imposed for the aid and abet fraud offence (as it related to Mr Rostankovski) and the money laundering offence committed by both offenders. The sentencing regime in the Crimes (Sentencing Procedure) Act 1999 (NSW) governed the blackmail offence.

11. While both offenders were entitled to a discount for their pleas of guilty, Mr Hausman also assisted investigating authorities and was entitled to an additional sentencing discount for that reason. The sentencing judge was obliged to comply with ss 16AC(1) and 16AC(2) of the Crimes Act (Cth) and s 23 of the Crimes (Sentencing Procedure) Act (NSW) by specifying the sentences that would have been imposed for the money laundering offence and the blackmail offence but for the assistance he provided to the authorities.

12. Senior counsel for Mr Rostankovski submitted that the sentences to be imposed on his client as a co-offender with Mr Hausman in the blackmail and money laundering offences should reflect common law parity principles. [1]

    1. The sentencing judge expressly referred to the principle of parity in both sentencing judgments (Mr Rostankovski [187]-[190] and Mr Hausman [133]-[134]).

13. The lengthy statements of agreed facts which comprehend the course of the offending by both offenders, the sentencing judge’s findings as to the relative seriousness of the offences committed by each of them, including their relative culpability, and the need for the sentences imposed to reflect the sentencing principles (articulated slightly differently under both sentencing regimes) are set out in largely uniform terms in both sentencing judgments. Necessarily, the subjective cases of both offenders were dealt with separately.

14. The form of the sentencing orders imposed on both offenders was complex, due in large part to the fact that both offenders were sentenced for State and Commonwealth offences.

15. Although an aggregate sentence may be imposed where the Court is sentencing for more than one State offence or more than one Commonwealth offence, there was no scope for the sentencing judge to impose a single aggregate sentence comprehending the State and Commonwealth offences committed by the offenders. The sentencing judge was obliged to impose separate sentences and non-parole periods for those offences[2] and to fix the starting date for each sentence as part of the sentencing order. [3] In their written submissions on sentence, the Crown and senior counsel for the offenders addressed the operation of ss 19(3) and 19(4) of the Crimes Act (Cth) and the way in which totality principles would influence the structure of the ultimate sentencing order. [4]

    2. Crimes Act (Cth) s 19AJ: see Hildebrand v R [2021] NSWCCA 9.

    3. Crimes Act (Cth) ss 19(3) and 19(4).

    4. The sentencing judge did utilise an aggregate sentencing approach when sentencing Mr Rostankovski for the aid and abet fraud offence and the money laundering offence: see Director of Public Prosecutions (Cth) v Beattie (2017) 270 A Crim R 556; [2017] NSWCCA 301.

16. In his submissions in this Court, counsel for Mr Hausman referred to what the Supreme Court of Victoria described as the very real difficulties which present when reconciling the principles that govern orders for cumulation and concurrency and the way those considerations inform totality principles more generally where both State and Commonwealth offences are the subject of the sentencing proceedings and where the operation of s 19(3) of the Crimes Act (Cth) is invoked. [5] Similar submissions were advanced in writing at the sentence hearing. The Crown also addressed the operation of s 19 in its written submissions on sentence.

    5. Director of Public Prosecutions (Vic) v Swingler (2017) 269 A Crim R 526; [2017] VSCA 305 at [63].

17. Section 19 of the Crimes Act (Cth) provides:

19  Cumulative, partly cumulative or concurrent sentences

General requirements

(1)  Where a person who is convicted of a federal offence or federal offences is at the time of that conviction or those convictions, serving, or subject to, one or more federal, State or Territory sentences, the court must, when imposing a federal sentence for that federal offence, or for each of those federal offences, by order direct when the federal sentence commences, but so that:

(a)  no federal sentence commences later than the end of the sentences the commencement of which has already been fixed or the last to end of those sentences; and

(b)  if a non‑parole period applies in respect of any State or Territory sentences—the first federal sentence to commence after the end of that non‑parole period commences immediately after the end of the period.

(2)  Where:

(a)  a person is convicted of 2 or more federal offences at the same sitting; and

(b)  the person is sentenced to imprisonment for more than one of the offences;

the court must, by order, direct when each sentence commences, but so that no sentence commences later than the end of the sentences the commencement of which has already been fixed or of the last to end of those sentences.

(3)  Where:

(a)  a person is convicted of a federal offence or offences, and a State or Territory offence or offences, at the same sitting; and

(b)  the person is sentenced to imprisonment for more than one of the offences;

the court must, by order, direct when each federal sentence commences but so that:

(c)  no federal sentence commences later than the end of the sentences the commencement of which has already been fixed or the last to end of those sentences; and

(d)  if a non‑parole period applies in respect of any State or Territory sentences—the first federal sentence to commence after the end of that non‑parole period commences immediately after the end of the period.

(4)  For the purpose of fixing the commencement of a sentence under this section, a reference in this section to a sentence the commencement of which has already been fixed includes a reference to another sentence imposed at the same time as the first‑mentioned sentence.

…

18. The Crown submitted in written submissions in the court below:

Section 19(3) of the Crimes Act requires that where an offender is sentenced to imprisonment for both State and Commonwealth offences in the same sitting the Court must direct that no federal sentence commences later than the end of another sentence, and, a federal sentence must commence immediately after the end of a State non-parole period.

19. At Mr Hausman’s sentence hearing, convened two days before Mr Rostankovski’s hearing, the sentencing judge sought assistance from the Crown as to the structure of the sentencing order where the Crown repeated that submission in the following exchange:

HIS HONOUR: Just in terms of the structuring, given the common ground that there is, you would be submitting that the state offence be sentenced first for imprisonment and then once upon the expiry of the non-parole period in relation to that state offence, the sentence for the federal offence would then commence. What's your position? Perhaps it written in your written submissions.

WRIGHT: It is set out in the written submissions and lest I misquote how that works, I might just turn it up. Para 68, the Court must direct that no federal sentence commences later than the end of another sentence, and a federal sentence must commence immediately after the end of a state non-parole period. So, I think that's consistent with what your Honour has just said.

Under the Commonwealth offence, there is no normal starting point as a percentage of the head sentence for the period that a federal offender should actually serve in prison. So, there's no question of special circumstances there. The length of the non-parole period must be the minimum time that your Honour determines justice requires.

20. In his oral submissions in reply, counsel for Mr Hausman addressed the effect of s 19(3) and its intersection with totality considerations:

In relation to the Commonwealth provision that prevents your Honour starting a Commonwealth offence, or Commonwealth Parole period, before the expiration of the state sentence, all it is is he can’t have a gap between them, is the effect of the law. It doesn't prevent your Honour starting the Commonwealth sentence at a period of time that overlaps with the state offence and, in fact, that would be what we would be submitting is the appropriate thing for your Honour to do, taking into account totality in this matter. But going back to the manner in which we used to accumulate state offences, where, for a two-year head offence you’d have a two-year head sentence with a denominated non-parole period and then you’d start the next state offence some way through that and proceed further, that’s still contemplated by the Commonwealth provision, it doesn't limit that occurring. And, in fact, we'd invite your Honour to do that ,because that ensures that your Honour appropriately takes into account the totality of this matter, where there’s clearly a significant overlap in the criminality of the two offences.

21. The issue was not addressed in Mr Rostankovski’s sentence hearing although the Crown’s written submissions on the operation of s 19(3) were repeated.

22. In sentencing both offenders, the sentencing judge expressly acknowledged the difficulties that presented in the formulation of the ultimate sentencing order and indicated his intention to follow the approach discussed in Swingler as commended to him by the Crown where, at [78], the Victorian Court of Appeal said:

The judge can group all the State offences together, and first sentence upon them individually. This has the advantage of enabling the sentences for the Commonwealth offences to be directed to commence at, for example, the expiration of the relevant State non-parole period. That avoids any gap in the custodial term, and seemingly simplifies the process, by ensuring that relevant rules as to cumulation and concurrency are applied appropriately, and within the proper sphere of each sentencing regime.

23. In this Court, the Director accepted that although there was nothing in the sentencing remarks to suggest his Honour did not understand how s 19(3) impacted on the structure of the sentences to be imposed on both offenders, the Director did accept that the wording of its submissions in the court below that “a federal sentence must commence immediately after the end of a State non-parole period” may have contributed to his Honour failing to appreciate that the Commonwealth sentence for both Mr Hausman and Mr Rostankovski could be ordered to commence prior to the expiration of the non-parole period for the State offence. That is, his Honour was not obliged, as the Crown might have been taken to have submitted, to order that the Commonwealth sentence commence at the expiration of the non-parole period for the State offence.

24. It will be necessary to consider this issue when dealing with the first ground of the Director’s appeal against the sentence imposed on both offenders. Suffice to note at this stage that in the Director’s submission, to the extent that the sentencing judge adjusted any of the individual sentences to accommodate what he wrongly believed was a fixed date for the commencement of the Commonwealth sentence (as the Crown emphasised, a matter that is unstated and unclear in the sentencing reasons) that should not prevent the first ground of appeal being made out, nor, to the extent that is a matter material to the exercise of the residual discretion, should it prevent this Court from intervening and resentencing the respondents in strict conformity with totality considerations.

25. The structure of the sentencing orders was further complicated by the absence of any statutory or judicially determined fixed ratio between a sentence and non-parole period for a Commonwealth offence, in contrast to the operation of s 44(1) of the Crimes (Sentencing Procedure) Act (NSW) which requires that the balance of the term of the sentence must not exceed one third of the set non-parole period. [6]

    6. Mr Hausman complains in Ground 2 of his application for leave to appeal the severity of his sentence that the sentencing judge did not translate a finding of special circumstances into the final sentencing order.

The proceedings in this Court in summary

26. On 9 April 2021, Mr Rostankovski and Mr Hausman filed notices of intention to apply for leave to appeal the severity of their sentence pursuant to s 5(1)(c) of the Criminal Appeal Act 1912 (NSW). No grounds of appeal were filed at that time.

27. On 5 May 2021, the Director filed notices of appeal against the sentences imposed on each the offenders pursuant to s 5D of the Criminal Appeal Act.

28. Although there is not complete correspondence between the grounds of appeal filed by the Director, the Director contends that the sentencing judge’s approach to the application of the principle of totality in the structure of both sentences was flawed, resulting in effective sentences which failed to adequately reflect the totality of the criminality of both offenders.

29. Even were the Court not persuaded that an error of sentencing principle has been demonstrated, the Director contends that each of the effective sentences is manifestly inadequate.

30. The Crown submitted that the limiting principles applicable to Crown appeals are properly engaged in each appeal and, as respondents, each of the offenders should be resentenced by this Court. [7]

    7. See Lowndes v The Queen (1999) 195 CLR 665; [1999] HCA 29, Green v The Queen; Quinn v The Queen (2011) 244 CLR 462; [2011] HCA 49, Bugmy v The Queen (2013) 249 CLR 571; [2013] HCA 37.

31. On 14 July 2021 and 20 July 2021, Mr Rostankovski and Mr Hausman filed notices of leave to appeal their sentence attaching their grounds of appeal.

32. They each contend that patent errors of sentencing principle were made by the sentencing judge which, both individually and in combination, require the intervention of this Court in a resentencing exercise. [8] Mr Rostankovski complains that the sentencing judge erred in the way in which he dealt with evidence of his good character. Mr Hausman complains that the sentencing judge erred in his application of parity principles and in the way he treated a finding of special circumstances. In addition, he contends that even were there no patent error of sentencing principle, latent error has infected the exercise of the sentencing discretion in an effective sentence of 8 years and 6 months, that is manifestly excessive being unreasonable and plainly unjust in all of the circumstances.

    8. Kentwell v The Queen (2014) 252 CLR 601; [2014] HCA 37.

33. Although separate Appeal Books were filed for each of the Crown sentence appeals, given the considerable overlap in the factual matrix that comprised the agreed facts in each of the sentence proceedings, and the intersection of issues raised by the grounds of appeal relied upon by the Director and the applications for leave to appeal by each of the offenders, the Director’s appeals and the applications for leave to appeal were heard together.

34. On the hearing of the appeals, the Director, as appellant, addressed first, followed by each of the offenders as respondents to the Crown appeal. The respondents were then invited to develop their written submissions as applicants for leave to appeal against the severity of their sentences to which the Director responded.

35. In the event that the Director succeeds on one or more than one of the grounds of appeal relied upon, and that in its residual discretion this Court does not decline to intervene and the respondents are resentenced, their applications for leave to appeal will not need to be determined.

36. In the event that the Director’s appeals are unsuccessful, and one or more of the grounds of appeal upon which the applicants rely are made out, and as required by Kentwell v The Queen (2014) 252 CLR 601; [2014] HCA 37, the Court is engaged in a resentencing exercise, the question will be whether this Court is persuaded that a lesser sentence is warranted.

The facts for sentencing purposes

37. In each of the sentence proceedings the facts were agreed and set out at length in each of the sentencing judgments. [9]

    9. Sentencing remarks: Mr Rostankovski [7]-[75], Mr Hausman [7]-[53].

38. Each of the offences the subject of the sentencing proceedings were committed in connection with a conspiracy committed (by others) to commit fraud on the Commonwealth known as the “Plutus tax fraud conspiracy”. The sentence proceedings of each of the offenders were described by the sentencing judge as “satellite or collateral proceedings” to the sentences imposed on various people involved in that conspiracy. [10]

    10. R v Anquetil [2020] NSWSC 995 at [89]; R v Kitson [2019] NSWSC 1109 at [43]; and R v Hammond [2020] NSWSC 888 at [46].

39. Having regard to the issues raised by the Director’s grounds of appeal and the issues raised by the sentence appeals, it will be sufficient to refer to the facts as agreed and the sentencing judge’s findings of fact in a summary way.

The tax fraud offence

40. The Plutus tax fraud conspiracy involved the establishment and utilisation of a payroll services company, named Plutus Payroll Australia Pty Ltd (Plutus) and related subcontracting companies (second tier companies) controlled by a number of conspirators, principally Adam Cranston and another co-conspirator, Jason Onley, to deprive the Commissioner of Taxation of Pay As You Go Withholding Tax (PAYGW) and Goods and Services Tax.

41. Over a three-year period between 2014 and 2017, Plutus collected $141,291,923 in PAYGW and GST which it was obliged to remit to the Australian Taxation Office (ATO). An amount just short of $31 million was remitted by the second-tier companies to the ATO with an additional sum of nearly $4.8 million garnisheed by the ATO. The conspirators misappropriated (and dealt with as proceeds of crime) at least $105,625,304.

42. Between August 2016 and February 2017 (the timeframe of Mr Rostankovski’s offending), the money generated by the conspiracy totalled nearly $51 million, of which only about $28.5 million had been remitted to the ATO. The balance was retained by the conspirators. It was accepted for sentencing purposes that Mr Rostankovski knew that Adam Cranston was the ultimate beneficiary of at least $7.5 million of the misappropriated funds.

43. From mid to late 2015, Mr Rostankovski began working for Adam Cranston doing relatively menial tasks in connection with another business run by Mr Cranston and another conspirator.

44. From 8 August 2016, Mr Rostankovski transitioned into a role in which he aided and abetted Adam Cranston’s fraudulent activities in the Plutus tax fraud conspiracy. His role was to recruit directors, in name only, to manage the “second tier” companies. These “straw directors” were variously unemployed or otherwise relatively unsophisticated people. [11] They played no actual role in the management of the company of which they were a director; instead the companies were controlled by the conspirators. The straw directors were paid to sign various documents as “director” as and when required by the conspirators, including opening personal and company bank accounts with Mr Rostankovski retaining bank cards and other account details which he provided to Mr Cranston.

    11. This was a characterisation of the character and status of the straw directors in the Statement of Agreed Facts. The extent to which Mr Rostankovski prevailed upon the straw directors to assume the roles given to them was the subject of submissions in support of his application for leave to appeal.

45. Mr Rostankovski actively misled the directors as to the tax liabilities that were accruing to the companies in perpetuation of the fraud. If a straw director raised concerns upon receipt of a notification from the ATO about an outstanding tax debt, Mr Rostankovski assured them that matter would be taken care of and that they were not engaging in any illegal conduct. He also discussed paying one second-tier director to leave the jurisdiction for at least a year to avoid that person being questioned by the ATO or the Office of State Revenue.

46. Mr Rostankovski organised for the payment of the straw directors of between $500 and $1,000 on a semi-regular basis and collected mail from them which he then delivered to the conspirators.

47. The sentencing judge found as a fact that during the period of Mr Rostankovski’s offending as an aider and abettor of the tax fraud he received at least $192,000 from funds which he knew had been diverted from the ATO pursuant to the conspiracy.

The blackmail offence

48. Between October and November 2016 (that is, during the currency of Mr Rostankovski’s role in aiding and abetting Adam Cranston to dishonestly cause a loss to the Commonwealth), Mr Rostankovski and Mr Hausman (with whom Mr Rostankovski had a pre-existing business and personal relationship) discussed and thereafter planned to blackmail the Plutus conspirators by threatening them with media exposure, reputational damage and scrutiny of their fraudulent activities by the ATO and the police, unless they were paid money. Some of the threats were directed to Adam Cranston whose father was at that time a Deputy Commissioner of Taxation.

49. As the sentencing judge noted in his sentencing remarks, the plan to blackmail the conspirators was devised when Mr Hausman became aware of Mr Rostankovski’s role in the tax fraud and of the significant amounts of money that were being transferred through bank accounts controlled by the conspirators and Mr Rostankovski was experiencing increasing dissatisfaction with his “wages” in contrast to the far greater and substantial sums of money the conspirators were receiving. The sentencing judge also noted and accepted the submissions of Mr Rostankovski’s senior counsel that the conspirators were “fobbing off” his requests for more money with false explanations for what they claimed was their inability to increase his “wages”.

50. The following is an overview of the facts relating to the joint commission of the blackmail offence by Mr Hausman and Mr Rostankovksi:

1. In November and December 2016, Mr Hausman and Mr Rostankovski discussed threatening Adam Cranston and arranging to execute the blackmail demand with the involvement of Stephen Barrett, a journalist who had worked at 60 Minutes. Mr Hausman emphasised that the timing of the demand was crucial. He recruited Mr Barrett.

2. Mr Hausman discussed with Sevag Chalabian, solicitor, a strategy designed to conceal the funds it was anticipated the Plutus conspirators would agree to pay. He later provided instructions to Mr Chalabian to affect that strategy.

3. On 24 January 2017, Mr Hausman and Mr Rostankovski disclosed their plan to Mr Barrett and discussed with him their understanding of the Plutus tax fraud scheme.

4. On 30 January 2017, Mr Chalabian provided Mr Hausman with his firm’s trust account details. Mr Hausman forwarded those details to Mr Rostankovski. On the same day, the offenders discussed their plan to blackmail the conspirators at Clamenz Lawyers’ office in Martin Place and the timing of the delivery of their demand. They also discussed the information Mr Barrett should be supplied with and Mr Rostankovski’s access to second tier company bank accounts.

5. On 1 February 2017, Mr Rostankovski and Mr Barrett met with Adam Cranston and Dev Menon (principal partner) at Clamenz. Mr Barrett introduced himself as a journalist with 39 years’ experience and said he was aware of an allegation of tax fraud involving Plutus and being perpetuated by Mr Cranston and others and that he had been approached by two “shadow directors”. Mr Barrett implied that if Mr Menon, Mr Cranston, Mr Cranston’s father and Jason Onley declined to be interviewed, he might disclose things to the then Federal Treasurer, Mr Morrison. Mr Rostankovski claimed (falsely) to be in possession of information that the conspirators would be arrested that afternoon. Mr Barrett then left the meeting.

6. Mr Rostankovski also claimed (falsely) that he had members of the Comancheros Motorcycle Club waiting downstairs who were ready to “come up and belt the fuck out of you guys” if they did not cooperate (a threat made without Mr Hausman’s knowledge).

7. Mr Rostankovski then telephoned a second-tier director and had him confirm on speaker phone his knowledge of the fraudulent scheme and the names of Adam Cranston, Mr Onley and Mr Menon as perpetrators of the fraud. Mr Rostankovski demanded $5 million as a “gag order”. He referred to laptops in his possession containing incriminating correspondence and emails. Mr Anquetil and Mr Onley (two co-conspirators) then joined the meeting and Mr Rostankovski repeated his demand that $5 million be transferred to the Lands Legal trust account (the first blackmail demand). Mr Menon agreed to the demand and that it would be met in payments disguised as Plutus overheads and other expenses involved in operating the second-tier companies.

8. Although Mr Hausman was not present when the first blackmail demand was made, he was party to its design. Mr Hausman’s conduct included:

1. Requesting his personal assistant to collect the two laptops containing the incriminating material before the meeting.

2. Keeping Mr Chalabian informed of developments, including Mr Menon’s desire to draft a Deed between Plutus and the directors of the second-tier companies, the object of which was to disguise the transfer of the $5 million in a way that disguised the true nature of the payments.

3. Mr Hausman told Mr Rostankovski that he had instructed Mr Chalabian to play “hardball” in his dealings with Mr Menon, not to “settle for anything less than two and half (million) today” and confirming that the monies to be transferred appear as a “commercial thing…(not) being paid as fuckin’… ATO money”.

4. Engaging in numerous communications between 1 and 3 February 2017 with Messrs Rostankovski, Chalabian, and Menon in which the Deed was discussed and drafted.

9. On 10 February 2017, Mr Hausman raised with Mr Chalabian the prospect of applying additional pressure on the Plutus conspirators for the payment of an additional $20 million.

10. On 15 February 2017, Mr Hausman sent Mr Rostankovski a draft message of demand for Mr Rostankovski to send to Mr Menon. Mr Rostankovski forwarded the demand the same day (the second blackmail demand).

11. While the message which was sent did not form part of the evidence, the draft prepared by Mr Hausman did. It was as follows (“(b), (c), (d)” being a reference to terms of the Deed):

… if their accounts get frozen no problem, the $ continues to minimum $20m under (b) (c) (d) etc and these directors will receive the $20m personally to remit off as they are, under the Act Dev, as you are well aware, personally liable for both super and PAYG which your clients Adam Cranston and Jay Onley would never pay. We are fully aware of GST ends up being worn by the company hence not a liable issue personally. So stop the bullshit and keep up the payments I strongly suggest.

12. Mr Hausman informed Mr Barrett of the second blackmail demand and arranged for him to be “on standby” in case it was necessary to exert pressure on the conspirators to agree to the demand.

13. Mr Hausman informed Mr Chalabian that he and Mr Rostankovski would pay him $20,000 for each million received into his trust account responsive to the second blackmail demand. He also discussed concealing the true nature of the blackmail monies with Mr Chalabian, including the name that would be given to Chalabian’s “client file”.

The money laundering offence

51. The following is an overview of the money laundering offence with which Mr Rostankovski and Mr Hausman were jointly charged:

1. Between 1 February 2017 and 18 May 2017, a total of $24,244,760.64 was paid into the Lands Legal trust account, comprising approximately $4.8 million received between 1 and 15 February 2017 responsive to the first blackmail demand, and approximately $19.4 million received between 16 February and 18 May 2017 responsive to the second blackmail demand.

2. Mr Hausman and Mr Rostankovski provided instructions to Mr Chalabian to disburse those monies. Aside from payments to a number of second-tier company directors, the monies were distributed to entities Mr Hausman controlled or had connections with, including overseas entities.

3. Between 9 and 13 March 2017, Mr Hausman and Mr Rostankovski instructed Mr Chalabian to prepare a Deed of Agreement dated 15 March 2017, according to which the blackmail monies and profits from investment opportunities to which the blackmail monies were committed would be distributed between them. In its essentials, the agreement noted that Rostankovski had access to $25 million and Mr Hausman would be paid 50% of profits from investment opportunities he introduced to Mr Rostankovski.

The findings of objective seriousness and the relative culpability of the offenders

The aid and abet fraud offence

52. The sentencing judge assessed the aid and abet fraud offence committed by Mr Rostankovski at about the mid-range of objective seriousness having regard to the amount of money involved in the fraud, the commission of which he aided and abetted, the degree of planning involved in the role he performed, the duration of his involvement relative to the duration of the overall fraudulent scheme, and the status of the Commonwealth as the victim of the fraud. The sentencing judge accepted the submission advanced by Mr Rostankovski’s counsel that he was not a member of “the inner circle” of those who conspired to perpetuate the tax fraud.

The blackmail offence

53. The sentencing judge assessed the blackmail offence as well above the mid-range and the money laundering offence also above the mid-range. He rejected the Crown’s submission that the conduct comprehended by the blackmail offence was in the high range of objective seriousness in circumstances where the impact of the threat made to the Plutus conspirators was of a different magnitude when compared to other cases to which he was referred and where the conspirators were able to absorb their payment of the blackmail monies as an “overhead” of their sophisticated and lucrative criminal enterprise. The sentencing judge also found the threat of exposing tax fraud was of a comparatively lesser order then the threat of exposure of other serious indictable offences, for example sexual assault, murder or violent physical assault.

54. He was satisfied that the blackmail offence (which involved two separate demands with menaces delivered over a reasonably short period of time and involving multiple victims) involved extensive planning over a period of three months. He also found that the first and second blackmail demands were more effective, and the threats of exposure more credible, because they were made whilst the tax fraud was ongoing. In addition, because the threats involved the revelation of actual criminal wrongdoing, he was satisfied the Plutus conspirators would be more likely to accede to the threat and were unlikely to complain to police.

55. The sentencing judge found Mr Hausman’s role and responsibility in the joint criminal enterprise to blackmail the Plutus conspirators was greater than that of Mr Rostankovski, with the “mechanisms” according to which the blackmail was planned and executed his design. Mr Hausman’s greater level of moral culpability was also reflected in his recruitment of Mr Barrett and Mr Chalabian and in his instigation of the second blackmail demand.

The money laundering offence

56. The sentencing judge found that the money laundering offence committed by Mr Hausman was well above the mid-range of objective seriousness and towards the high end of that range with the most material factors in that appointment being the sum of money involved, Mr Hausman’s knowledge of the illegal source of those monies and what the sentencing judge described as the sophisticated and organised level of planning involved in the commission of the offence in order that the proceeds of the blackmail would be concealed. He also found that Mr Hausman was the architect of the money laundering scheme and that he had the lead role in working with Mr Chalabian to receive and dispose of the proceeds. The sentencing judge rejected the Crown’s submission that Mr Hausman’s conduct was in the high range of objective seriousness. He found that although Mr Hausman’s conduct in the money laundering offence was intimately connected with his role in committing the blackmail offence, and in that sense it was intended to exploit and conceal the product of that offending, it did not form part of any ongoing organised criminal activity.

57. The sentencing judge assessed Mr Rostankovski’s offending in his commission of the money laundering offence as above the mid-range of objective seriousness, being partly a function of his role relative to Mr Hausman. The sentencing judge emphasised, however, that Mr Rostankovski was not a passive investor who merely acquiesced in Mr Hausman and Mr Chalabian’s dealings. To the contrary. Mr Rostankovski insisted that he be “kept in the loop” and instructed Mr Chalabian to use a company over which he exercised control as a vehicle for the investment of the proceeds of his offending.

58. The sentencing judge was satisfied that each of Mr Hausman and Mr Rostankovski gained financially through their profit-sharing agreement.

59. In sentencing both offenders for multiple, objectively serious offences, the sentencing judge treated general deterrence as fundamental to the sentencing exercise.

Mr Hausman’s subjective case

60. Mr Hausman was aged 51 of the time of sentence. He had no relevant prior criminal record which the sentencing judge accepted reduced the need for the sentence to reflect specific deterrence.

61. Mr Hausman had two dependent children from two previous partners. In reviewing the evidence tendered by Mr Hausman to support a finding that his pending incarceration would impact negatively upon each of his children, the sentencing judge was not satisfied that the hardship his family would experience was exceptional. [12] He did however accept that given that Mr Hausman would be experiencing custody for the first time, and that separation from his wife and children would be onerous for that reason, those factors would be taken into account in determining the length of the non-parole periods for both the State and Commonwealth offences.

    12. The sentencing judge cited Elshani v R (2015) 255 A Crim R 488; [2015] NSWCCA 254. See also R v Zerafa (2013) 235 A Crim R 265; [2013] NSWCCA 222 at [93].

62. The sentencing judge noted the medical evidence relating to Mr Hausman’s physical and mental health, including that he suffers from Type II diabetes which had been poorly controlled in the year prior to sentence. He also noted Mr Hausman had been diagnosed with a depressive disorder and a substance use disorder which are controlled by medication.

63. There was no submission advanced on Mr Hausman’s behalf that his physical or mental health contributed in any material way to his offending or reduced his criminal culpability. It was submitted, however, that his relatively fragile health status was likely to deteriorate in the custodial environment and that his time in custody would be more onerous for that reason. After reviewing the reports tendered from a range of health professionals, the sentencing judge was not satisfied the evidence was of sufficient weight to allow for a finding that Mr Hausman’s health would deteriorate in custody such as might have ameliorated the length of his sentence. He was satisfied that Mr Hausman’s rehabilitation may be hindered were his mental health inadequately treated whilst in custody, a matter which the sentencing judge took into account when finding special circumstances existed to justifying varying the statutory non-parole period for the State offence of blackmail. The length of the non-parole period for the Commonwealth money laundering offence was brought into alignment with the ratio applied to the State offence.

64. The sentencing judge was satisfied that Mr Hausman was contrite and remorseful despite having not given evidence on sentence. He accepted that Mr Hausman’s early pleas of guilty entered in the Local Court, his letter to the Court (tendered on sentence without objection) in which he spoke of his shame and self-disgust at being driven to offend out of greed, together with his willingness to cooperate with law enforcement authorities, was eloquent of his remorse. The sentencing judge was also satisfied that Mr Hausman’s consent to the forfeiture of various interests in property valued at $17 million in separate forfeiture proceedings reinforced the other evidence of his remorse and enhanced his prospects for rehabilitation.

65. The sentencing judge was satisfied there was little likelihood of Mr Hausman reoffending and that he had good prospects of rehabilitation.

66. Mr Hausman was afforded a combined sentencing discount of 50% which took account of the early guilty pleas (25%), his past assistance (5%) and his future assistance to authorities (20%) which the sentencing judge accepted was of high value. [13] I note that at the time of sentence Mr Hausman was expected to give evidence in the separate trials of Mr Barrett and Mr Chalabian in accordance with his undertaking. I also note that he has already given evidence in the trial of Mr Barrett which resulted in a hung jury. Mr Barrett’s retrial is scheduled for February 2022. It is expected that Mr Hausman will give evidence in that trial. Mr Chalabian’s trial is also listed for hearing in 2022.

    13. The sentencing judge noted that the State and Commonwealth sentencing regimes differ as to the need to specify the discounts for assistance and the way in which the sentencing court is to assess the value of the assistance.

Mr Rostankovski’s subjective case

67. Mr Rostankovski had no criminal record. He adduced positive evidence of his good character which the sentencing judge found established. [14] He was aged 27 at the time of the offending and 32 at the date of sentence.

    14. The sentencing judge diminished the weight given to these factors due, in part, to the offences committed. This was the subject of Mr Rostankovski’s application for leave to appeal his sentence and will be discussed later.

68. The sentencing judge accepted that Mr Rostankovski was remorseful and contrite, that the likelihood of him reoffending was very low and his prospects of rehabilitation were good.

69. A report of Dr Dayalan, forensic psychiatrist to whom Mr Rostankovski had given a history of physical and emotional abuse by his father, was tendered. Dr Dayalan expressed the opinion that features of Mr Rostankovski’s psychological profile contributed to his offending, including chronic low self-confidence and self-esteem and a sense of inadequacy, making him susceptible to adverse influence from others. Dr Dayalan diagnosed an adjustment disorder which had developed after Mr Rostankovski’s arrest.

70. The sentencing judge accepted that psychological features played a role in Mr Rostankovski’s commission of the aid and abet fraud offence by reason of the money he was receiving and the fact that Adam Cranston and the Plutus conspirators appeared to him to be successful business people, which may have had a “dizzying impact”, compromising his judgment. However, as the sentencing judge noted, Mr Rostankovski chose to remain involved with Mr Cranston despite becoming aware of the scale of the tax fraud. The sentencing judge found no causal link between any susceptibility Mr Rostankovski had to the influence of others in his commission of the blackmail and money laundering offences

71. The sentencing judge was not satisfied that Mr Rostankovski had suffered extra-curial punishment in the form of an absence of paid employment since his arrest and his wife losing her employment.

72. In sentencing for the State offence of blackmail, his Honour made a finding of special circumstances to facilitate Mr Rostankovski’s rehabilitation and his effective reintegration into the community following his release and, to a lesser degree, because of hardship to his family.

The structure of the sentence imposed on Mr Rostankovski

73. The total effective sentence of 10 years and 5 months with a non-parole period of 7 years and 2 months imposed on Mr Rostankovski comprised an aggregate sentence of 8 years for the two Commonwealth offences of aid and abet a fraud and money laundering and a separate sentence of 4 years for the blackmail offence.

The aggregate sentence for the Commonwealth offences

74. After taking into account the pleas of guilty to the two Commonwealth offences and allowing a 20% discount for the timing of the pleas, their utilitarian value and the willingness of Mr Rostankovski to facilitate the course of justice,[15] sentences of 1 year and 7 months for the aid and abet a fraud offence and 9 years and 6 months for the money laundering offences were indicated. Recognising what the sentencing judge described as the need for “a degree of accumulation” between the two indicative sentences due, as he saw it, to the fact that there would not have been any money laundering were it not for Mr Rostankovski’s involvement in the tax fraud, and the fact that greed was a motivator in the commission of both offences, an aggregate sentence of 10 years imprisonment was proposed. In the ultimate sentencing order that aggregate sentence was reduced to a term of imprisonment of 8 years and was ordered to commence at the expiration of the non-parole period for the State offence of blackmail.

    15. Citing Xiao v R (2018) 96 NSWLR 1; [2018] NSWCCA 4 and Huang v R (2018) 96 NSWLR 743; [2018] NSWCCA 57.

The blackmail offence

75. After applying a discount of 20% for the plea of guilty to the blackmail offence[16] a sentence of 4 years and 9 months was appointed. In the ultimate sentencing order, a term of imprisonment of 4 years was imposed with a non-parole period of 2 years and 5 months. In compliance with s 19(3) of the Crimes Act (Cth) that sentence was ordered to commence first.

    16. Crimes Act (NSW) s 249K(2).

76. Earlier in his sentencing remarks the sentencing judge acknowledged the need for the ultimate sentence to reflect totality principles, qualified by the need to ensure that its overall effect was not “crushing”. He said:

[198] Because I am sentencing for multiple offences, in the case of this offender, I am required to fix an appropriate sentence for each offence, and thereafter consider accumulation, concurrency and totality. Complexity is also injected by the circumstances of mixed federal and state sentences, with the requirement for separate non-parole periods.

[199] I consider that it is important that an element of accumulation is required to comprehend the full extent of the criminality, and recognising the different features of the criminality. Nevertheless, substantial notional concurrency is appropriate. By way of one example, at a time in which the offender was involved in planning the blackmails co-incided with the period for the aid and abetting offence; and the blackmailing could not have occurred but for the knowledge of pertinent information which the offender obtained during course of his aiding and abetting. Further, the money laundering was plainly connected and occurred within a short period of time, and to some degree almost contemporaneously, to the blackmailing. The laundering would not have happened but for the aiding and abetting. I am also conscious, however, that the overall effect of the sentencing should not be ‘crushing’, and have striven to apply the ‘totality’ principle in this regard.

77. The sentencing judge then made the following sentencing order which I set out in full:

[201] Because of the complexities surrounding sentencing for the mix of federal and state offences, I propose to aggregate the sentence for the federal offences.

[202] The indicative sentences for counts 1 and 3, taking into account the guilty pleas, are as follows:

Count 1 [the aid and abet fraud offence]: 1 year and 7 months’ imprisonment

Count 3 [the money laundering offence]: 9 years and 6 months’ imprisonment

[203] I impose an aggregate sentence for counts 1 and 3 for the period of 10 years imprisonment, taking into account the pleas. This recognises a degree of accumulation to reflect the circumstance that there would not have been any money laundering but for the aiding and abetting of the frauds and a common motivation of greed.

[204] The starting point for the sentence for count 2 is 6 years which, with the 20% discount for the plea, reduces to 4 years and 9 months.

[205] Applying the principle of totality, as between aggregate federal sentence and the state sentence result in a notional net effective term of 12 years imprisonment. The aggregate federal offence has been adjusted to provide for a significant measure of concurrency, whilst maintaining some level of accumulation, and to generally reflect the totality principle I have applied.

[206] In terms of starting date for the sentence, I factor in the circumstance of the offender having spent a day in custody.

…

[209] Taking into account the matters I have mentioned I sentence you as follows.

[210] On count 2, I sentence you to a term of imprisonment for a term of imprisonment of 4 years, commencing on 31 March 2021 and expiring on 30 March 2025, with a non-parole period of 2 years and 5 months expiring on 30 August 2023.

On counts 1 and 3, I sentence you to a term of imprisonment of 8 years, commencing on 31 August 2023 and expiring on 30 August 2031, with a non-parole period of 4 years and 9 months expiring on 30 May 2028.

[211] I am required by s 16F of the Crimes Act to explain the aggregate sentence imposed for counts 1 and 3, being the money laundering and aid and abet offences. I have imposed an effective term of imprisonment of 8 years to commence on 31 August 2023 and a non-parole period of 4 years and 9 months. You will commence serving your sentence for the federal offences after your completion of the non-parole period for the sentencing for count 2, being for the blackmail offence. You are eligible for release on 30 May 2028. This means that you will be imprisoned for a period of not less than 4 years and 9 months for the federal offences, immediately upon the expiration of the non-parole period of 2 years and 5 months that you are serving for the blackmail offence. If you are granted parole on 30 May 2028, you will serve the balance of your sentence in the community, but your parole will be subject to conditions determined by the relevant parole authority, which conditions may be amended or revoked. If you fail, without reasonable cause, to comply with the conditions of parole, your parole may be revoked and you may be taken back into custody to serve the remainder of your head sentence.

The structure of the sentence imposed on Mr Hausman

78. Mr Hausman was also sentenced for the State offence of blackmail and the Commonwealth offence of money laundering offence. The total effective sentence comprised what the sentencing judge described as “the notional starting point for the head sentences of both the State and Commonwealth offences of 10 years and 15 years respectively” to each of which he applied a 50% discount to reflect the combined value of Mr Hausman’s pleas of guilty (25%) and his assistance to the authorities (20% for future assistance and 5% for past assistance[17] ) from which was derived what the sentencing judge described as “the appropriate sentences [of] 5 years (for the blackmail offence) and 7 years, 6 months (for the money laundering offence)”. He went on to say:

[139] In my view the notional starting point for head sentences should be 10 years’ imprisonment for the blackmail offence and 15 years for the money-laundering offence, respectively. But after the combined discount (50%) that I have referred to has been factored into for each of those sentences, the appropriate sentences are 5 years (for the blackmail offence) and 7 years, 6 months (for the money laundering offence) respectively. Then, applying the totality principle, factoring in notional concurrency and some notional accumulation, the notional total effective head sentence would be 10 years’ imprisonment. The separate sentences I impose will reflect the application of that principle in the way I have indicated.

[140] As indicated, I consider that the same non-parole period should apply to both offences.

17. The value of the assistance as it attached to the State offence was assessed by the sentencing judge in accordance with s 23 of the Crimes (Sentencing Procedure) Act. The value of the assistance as it attached to the Commonwealth offence was assessed referable to the operation of ss 16A(2)(h) and 16AC of the Crimes Act (Cth).

79. Earlier in his sentencing remarks the sentencing judge acknowledged, as he did when sentencing Mr Rostankovski, the need for the ultimate sentence to reflect totality principles qualified by the need to ensure that its overall effect was not “crushing”. He said:

[136] I consider that it is important that an element of accumulation is required to comprehend the full extent of the criminality, and recognising the different features of the criminality. The money laundering was plainly connected and occurred within a short period of time, and to some degree was planned before or almost contemporaneously, to the blackmailing. Both offences shared the common motivation of greed. I am also conscious, however, that the overall effect of the sentencing should not be ‘crushing’.

80. The sentencing judge then made the following order which I set out in full:

[142] You are convicted of counts 1 and 2 on the indictment.

[143] Having taken into account, for each offence, your pleas and your past and future assistance to law enforcement authorities (yielding a combined discount of 50%):

On count 1, you are sentenced to a term of imprisonment for 5 years, commencing on 30 March 2021 and ending on 29 March 2026, with a non-parole period of 3 years expiring on 29 March 2024.

On count 2, you are sentenced to a term of imprisonment for 5 years, commencing on 30 March 2024 and ending on 29 March 2029, with a non-parole period of 3 years, expiring on 29 March 2027.

[144] I am required to set out the period of imprisonment and non-parole period I would have imposed in relation to count 2, being the money laundering offence, but for your undertaking to assist in the future (s 16AC of the Crimes Act) for your future assistance to authorities. But for your undertaking (yielding a 20% discount), I would have imposed a period of imprisonment of 6 years and 3 months’ imprisonment for count 2, being the money laundering offence, with a non-parole period of 3 years and 9 months. If you do not adhere to your undertaking to assist in the future, the Commonwealth Director of Public Prosecutions may appeal against the adequacy of the reduced sentence I have imposed under s 16AC(3) of the Crimes Act.

[145] I am also required to state the penalty that would have been imposed in relation to count 1, the blackmailing offence, but for your assistance. In contrast to the requirements of federal sentencing law, however, the requirement to state the impact of your assistance extends to both the past and the future (s 23(4) of the CSP Act). The discount on this sentence, for past and future assistance, is a combined discount of 25%. That means that but for your past and future assistance, you would have received a sentence of imprisonment on the blackmail offence of 6 years and 8 months.

The Crown appeals

81. The grounds of appeal filed by the Director against the sentences imposed on the respondents were particularised differently.

82. The Director relied on the following grounds of appeal in its appeal against Mr Rostankovski’s sentence:

1. The sentencing judge erred in his application of the totality principle.

2. The following components of the sentence imposed by the sentencing judge are manifestly inadequate:

1. The individual sentence on Count 2;

2. The aggregate sentence for Counts 1 and 3;

3. The total effective head sentence; and

4. The total non-parole period.

Particulars of Ground 2

1. There was a disparity between the sentences imposed and what was necessary to reflect the objective gravity of each of the offences.

2. The excessive allowance for totality resulted in manifestly inadequate sentences.

83. The Director relied on the following grounds of appeal in the appeal against Mr Hausman’s sentence:

1. The sentencing judge erred in his application of the totality principle.

2. The sentencing judge erred in specifying the sentence that would have been imposed but for the reduction made for the respondent’s undertaking to co-operate with law enforcement authorities.

3. The following components of the sentence imposed by the sentencing judge are manifestly inadequate:

1. The individual sentence on Count 2; and

2. The total effective head sentence.

84. Despite the Director’s contention in the second ground of Mr Rostankovski’s appeal that error in the application of the totality principle (at least by reason of an excessive allowance for totality) resulted in a manifestly inadequate sentence, and although a contention in similar terms was not made in the Director’s appeal against Mr Hausman’s sentence, because the first ground in both appeals contends that a discrete and patent sentencing error was committed in the sentencing judge’s application of totality principles, an error which, if established, and subject to the principles applicable to Crown appeals, would require this Court to resentence both respondents, it is convenient to deal with the first ground in both appeals before considering whether the Director has demonstrated that the effective sentence imposed on each of the respondents is manifestly inadequate in any event, either because the sentences imposed for the individual offences are themselves manifestly inadequate and/or because the total effective head sentence suffers from that flaw.

85. In the course of the hearing an issue arose as to whether, should the first ground of appeal be made out, the Court should be concerned with the question whether in the exercise of this Court’s residual discretion to decline to intervene and to resentence the respondents, it was necessary to undertake an assessment of the inadequacy of their sentences. In the Director’s submission, the identified error in relation to totality in both appeals would, of itself, satisfy the Court that it should not refuse to exercise its discretion to resentence the respondents without it being necessary for the Court to find that the sentence imposed on each of the offenders was also manifestly inadequate.

86. In support of that submission, the Crown referred to a line of High Court authority succinctly summarised in CMB v Attorney-General for New South Wales (2015) 256 CLR 346; [2015] HCA 9 where, at [33], French CJ and Gageler J said:

Descriptions of the discretion expressly so conferred on the Court of Criminal Appeal as “residual” ought not to be misunderstood. To enliven the discretion, it is incumbent on the appellant in an appeal under s 5D to demonstrate that the sentence pronounced by the court of trial turned on one or more specific errors of law or of fact, or, in the totality of the circumstances, was unreasonable or plainly unjust [Markarian v The Queen (2005) 228 CLR 357 at 371 [28]; [2005] HCA 25; Carroll v The Queen (2009) 83 ALJR 579 at 581 [7]; 254 ALR 379 at 381; [2009] HCA 13, citing House v The King (1936) 55 CLR 499 at 504-505; [1936] HCA 40; Bugmy v The Queen (2013) 249 CLR 571 at 597 [51]; [2013] HCA 37]. The discretion is residual only in the sense that its exercise does not fall to be considered unless that threshold is met. Once the discretion is enlivened, it remains incumbent on the appellant in an appeal under s 5D to demonstrate that the discretion should be exercised.

87. Their Honours went on to refer to Heydon JA in R v Hernando (2002) 136 A Crim R 451; [2002] NSWCCA 489 where, at [12], his Honour observed:

… if [the Court of Criminal Appeal] is to accede to the Crown's desire that the respondent be sentenced more heavily, it must surmount two hurdles. The first is to locate an appellable error in the sentencing judge's discretionary decision. The second is to negate any reason why the residual discretion of the Court of Criminal Appeal not to interfere should be exercised.

88. Kiefel J (as her Honour then was), Bell and Keane JJ also said, at [54]:

Appeals against sentence, whether by the offender or the prosecution, require demonstration of error in one or more of the respects identified in House v The King [(1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ; [1936] HCA 40]. Where error of that kind is established in an appeal by the offender, it is the duty of the Court of Criminal Appeal to exercise the sentencing discretion afresh [Kentwell v The Queen (2014) 88 ALJR 947 at 957-958 [42]-[43] per French CJ, Hayne, Bell and Keane JJ; 313 ALR 451 at 462; [2014] HCA 37]. Where error of that kind is established in an appeal by the prosecution, the Court of Criminal Appeal may in its discretion dismiss the appeal notwithstanding that the sentence is erroneously lenient [Criminal Appeal Act 1912 (NSW) s 5D(1)]. This is sometimes described as "the residual discretion". As French CJ and Gageler J explain, the discretion is residual only in that its exercise does not fall to be considered unless House error is established.

89. In the Crown’s submission, the passages cited are authority for the proposition that were the Crown to establish patent error in the sentencing judge’s treatment of totality principles alone (that is, without the need for a further finding of manifest inadequacy) the Court’s discretion to intervene would be enlivened.

90. The Crown did however acknowledge that this Court has expressed divergent views on that issue.

91. In R v Janceski [2005] NSWCCA 288, decided shortly after Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 (although not referring to it), the Crown alleged manifest inadequacy in the sentence imposed. The Crown also pointed to a number of errors made by the sentencing judge which may have contributed to the inadequacy. Hunt AJA said of the sentence at [25]:

… the only issue in this appeal is, in the end, whether the total sentence imposed even if erroneously reached by the sentencing judge — was manifestly inadequate in the circumstances of this case. The mere demonstration by the Crown of legal error by the sentencing judge in this case does not throw the sentence open for redetermination unless the sentence he imposed is itself objectively manifestly inadequate. That issue must be reserved until the other errors which the Crown asserts have been considered.

92. The Crown submitted that the analysis by Hunt AJA in Janceski is not authority for the proposition that absent a ground of appeal alleging manifest inadequacy, a manifestly inadequate sentence must be shown to have been imposed in order for the discretion to be enlivened. [18]

    18. Transcript p 6.

93. The Crown also referred to Manojlovic v R; R v Manojlovic [2020] NSWCCA 315, in which N Adams J rejected the Crown’s submission that the Court should exercise its discretion to intervene and resentence on a Crown appeal even were the Court not satisfied that the sentence was manifestly inadequate. Her Honour expressed the following view at [244]:

There is nothing in the judgment of French CJ and Gageler J in CMB at [33] to suggest that in an appeal brought under s 5D of the Criminal Appeal Act, this Court can intervene and impose a higher sentence without first being satisfied that manifest inadequacy was established. Such a proposition would be inconsistent with Everett v The Queen which French CJ and Gageler J expressly endorsed in CMB at [35]. Although it is to be accepted that their Honours stated (at [33]) that before the residual discretion comes to be exercised either latent or patent error must be established, their Honours did not go on to say anything to the effect that an appellate court could, after declining to exercise the residual discretion, increase a sentence that was not manifestly inadequate.

94. In that case, her Honour was ultimately satisfied that the sentence under challenge was manifestly inadequate. That being the case, her Honour’s consideration of whether the discretion may be exercised without a finding of manifest inadequacy is strictly obiter.

95. The Crown referred to two more recent decisions of this Court,[19] together with Director of Public Prosecutions (NSW) v Burton [2020] NSWCCA 54 (which was relied on by the Crown in Manojlovic) in which Beech-Jones J (as his Honour then was) queried the correctness of the approach proposed by N Adams J in Manojlovic.

    19. Director of Public Prosecutions v Abdulrahman [2021] NSWCCA 114; R v Dong [2021] NSWCCA 82.

96. In Dong, [20] his Honour said at [6]:

In Director of Public Prosecutions (NSW) v Burton [2020] NSWCCA 54 at [33], Basten JA noted that it is not necessary for the Crown on an appeal of this kind to also establish that the sentence was manifestly inadequate, although that is a factor in addressing both resentencing and the residual discretion. In Manojlovic v R; R v Manojlovic [2020] NSWCCA 315 at [242] to [243], N Adams J queried this before stating that “[f]or my part, it seems doubtful that this Court would ever decline to exercise its residual discretion and go on to intervene to increase a sentence in a Crown appeal before first being satisfied that the sentence imposed was manifestly inadequate”. Both Hoeben CJ at CL (at [159]) and Button J (at [161]) agreed with her Honour.

20. R v Dong [2021] NSWCCA 82.

97. In oral argument, Mr Walker SC for Mr Rostankovski observed that the Crown’s second ground of appeal, which alleged manifest inadequacy on multiple bases, included “an error in the application of the totality principle by reason of… excessive allowance for it resulting in manifestly inadequate sentences”. For that reason, he submitted that the contested significance or necessity of also demonstrating manifest inadequacy before the residual discretion to decline to intervene is enlivened does not arise.

98. For the reasons which follow, since I am not persuaded that the error of principle the subject of the first ground of the Director’s appeals has been made out, any difference in the approach taken by judges of this Court in the decisions to which we were referred does not need to be decided.

The first ground of appeal

Did the sentencing judge err in the application of totality principles?

99. At the hearing of the appeal there was no disagreement as to the principles that emerge from the authorities concerning the totality principle, not least that its application in any given case is discretionary. Those principles should, however, be briefly restated.

100. In Mill v The Queen (1988) 166 CLR 59; [1988] HCA 70 (Mill) at 63, the totality principle was identified as a recognised principle of sentencing to assist the court when structuring a sentence involving multiple offences. By adopting the following statement from Thomas, Principles of Sentencing, [21] its operation was described by the High Court [22] as follows:

The effect of the totality principle is to require a sentencer who has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed and each properly made consecutive in accordance with the principles governing consecutive sentences, to review the aggregate sentence and consider whether the aggregate is ‘just and appropriate’. The principle has been stated many times in various forms: ‘when a number of offences are being dealt with and specific punishments in respect of them are being totted up to make a total, it is always necessary for the court to take a last look at the total just to see whether it looks wrong[‘]; ‘when ... cases of multiplicity of offences come before the court, the court must not content itself by doing the arithmetic and passing the sentence which the arithmetic produces. It must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences’.

21. 2nd ed (1979) pp 56-57.

22. Wilson, Deane, Dawson, Toohey and Gaudron JJ.

101. In the immediately following passage, the Court in Mill noted the language used by Lord Parker LCJ in R v Faulkner (1972) 56 Cr App R 594 that the question whether the imposition of cumulative sentences was commensurate with the gravity and totality of the criminal conduct was accompanied by taking what has been described as “a last look” at the total sentence to see whether it looks wrong. [23]

     23. Also cited by Payne JA in ZA v R (2017) 267 A Crim R 105; [2017] NSWCCA 132 at [69].

102. In Pearce v the Queen (1998) 194 CLR 610; [1998] HCA 57, McHugh, Hayne and Callinan JJ (at 623-624), citing Mill, expressed the effect of the totality principle, albeit from the offender’s perspective:

To an offender, the only relevant question may be “how long”, and that may suggest that a sentencing judge or appellate court should have regard only to the total effective sentence that is to be or has been imposed on the offender. Such an approach is likely to mask error. A judge sentencing an offender for more than one offence must fix an appropriate sentence for each offence and then consider questions of cumulation or concurrence, as well, of course, as questions of totality.

103. In Mill (at 63), the Court suggested two approaches to achieving totality:

Where the principle falls to be applied. in relation to sentences of imprisonment imposed by a single sentencing court, an appropriate result may be achieved either by making sentences wholly or partially concurrent or by lowering the individual sentences below what would otherwise be appropriate in order to reflect the fact that a number of sentences are being imposed. Where practicable, the former is to be preferred.

104. The Court in Johnson v The Queen [2004] HCA 15[24] affirmed the principle of totality established in Mill and Pearce in the following passage:

The first matter to be noticed in this regard is that the joint judgment in Pearce recognizes the currency of Mill by referring to the principle of totality which it reiterates. The joint judgment in Mill expresses a preference for what should be regarded as the orthodox, but not necessarily immutable, practice of fixing a sentence for each offence and aggregating them before taking the next step of determining concurrency. Pearce does not decree that a sentencing judge may never lower each sentence and then aggregate them for determining the time to be served. To do that, is not to do what the joint judgment in Pearce holds to be undesirable, that is, to have regard only to the total effective sentence to be imposed on an offender. The preferable course will usually be the one which both cases commend but neither absolutely commands. Judges of first instance should be allowed as much flexibility in sentencing as is consonant with consistency of approach and as accords with the statutory regime under which the sentencing is effected. (Emphasis added.)

24. Per Gummow, Callinan and Heydon JJ with whom Gleeson CJ agreed at [26].

105. As a matter of sentencing principle there is no general rule that dictates whether sentences should be imposed concurrently or consecutively, regardless of whether the offences were committed as part of a single episode of criminality or constituted discrete acts of criminality. It is the application of totality principles that will inform that question. [25] That is not to say that in recognition of the underlying principle of totality that a sentence for multiple offences not be crushing, that the sentencing judge might not also adjust the individual sentences before ultimately determining whether the total effective sentence appropriately factors in considerations of concurrency or accumulation, or that it would be an error of sentencing principle for the sentencing judge to take that approach.

     25. Cahyadi v R (2007) 168 A Crim R 41; [2007] NSWCCA 1 at [27].

106. While it might be said that the High Court in Johnson and other decisions of this Court which have followed it[26] have considered that the preferred or conventional approach in applying totality principles is to determine the degree to which the individual sentences should be concurrent, partly concurrent or wholly accumulated (or a notional assessment of those considerations when an aggregate sentence is imposed), the ultimate question is whether in application of totality principles the ultimate and effective sentence adequately and fairly encompasses the totality of the criminality so as to arrive at a sentence which also satisfies the principle of proportionality.

     26. See for example Sigalla v R [2021] NSWCCA 22.

235. By reference to R v Gent [2005] NSWCCA 370 at [55]-[59]; (2005) 162 A Crim R 29 at 42-43, the Director submitted “it is well established that good character carries less weight with respect to certain classes of offences” and identified fraud and money laundering as two such offences because of the need for “denunciation, punishment and general deterrence.” Reliance was placed on the judgments in R v Rivkin (2004) 59 NSWLR 284; [2004] NSWCCA 7 and R v Huang [2007] NSWCCA 259; (2007) 173 A Crim R 370.

236. Another kind of offence where it has sometimes been held that the offender’s good character played a role in their ability to commit the offence are those involved in drug trafficking: see, for example, R v Leroy (1984) 2 NSWLR 441 and R v Nguyen [2010] NSWCCA 238; (2010) 205 A Crim R 106. In R v Leroy, Street CJ observed that some offenders in the chain of drug trafficking are selected because their clean records enable them to escape suspicion and detection. Typically, this might involve those chosen to be couriers crossing international borders with large quantities of narcotics.

237. Another frequently occurring category of case where this principle may apply involve child sex offenders whose high status or vocation enable them to abuse a position of trust and make it less likely that a victim will complain. Members of the clergy and teachers sometimes fall into this category. An infamous example of such a case is Ryan v The Queen (2001) 206 CLR 267; [2001] HCA 60, at 274 [21] (McHugh J), 288 [69] (Gummow J) and 318 [176] Callinan J. The High Court was divided on the question of whether the repeated sexual offending committed by a priest over many years was such that other evidence of his good works and character ought to be disregarded altogether. Ultimately, a majority (McHugh, Kirby and Callinan JJ; Gummow and Hayne JJ dissenting) upheld the appeal against a decision of this Court confirming the sentencing Judge’s decision that the good character evidence was entitled to no weight. The judgments in Ryan demonstrate that, while general propositions might be stated, those propositions ought not to be applied inflexibly. The matter is one to be determined by the proper application of principle to the particular facts and circumstances of the individual case.

238. The same applies to any general proposition to the effect that in cases of “white collar crime” or, to move away from that somewhat slippery label, [44] in cases of fraud and money laundering, there is an inflexible or general proposition that an offender’s good character is entitled to little or no weight as a mitigating factor. It is true that some cases of fraud or money laundering involve the offender using their position of trust, and related good character and repute, to facilitate the commission of the offence. Examples might include company directors, accountants, financial advisers and others whose position makes it easier for the offending to occur. In such cases, the target of the dishonest dealing may be more susceptible to be deceived because of the trusted or apparently exalted position of the offender. In money laundering offences, there may be cases where the principals use the accounts and services of an offender because their good character or lack of criminal record is less likely to arouse suspicion or investigation. This is analogous to the drug mule who is engaged because their lack of prior convictions makes it less likely that they will arouse suspicion at a border or check-point. There was no evidence that Mr Rostankovski’s case involved such features or characteristics.

     44. As to which, and as referred to in Mr Rostankovski’s written submissions (at [31]), see the observations of Simpson J (as her Honour then was) in R v Brown (unrep, 1/8/94 NSWCCA) that the label “is so various in its manifestations and nature that it is scarcely susceptible of precise definition or of defined sentencing principles”.

239. Another example of a case where evidence of prior good character or a lack of prior convictions might be disregarded is one where the crime is so heinous that the objective criminality and/or moral culpability is so extreme that it effectively swamps other relevant factors: Ryan v The Queen at 300 (Kirby J). By way of example, a horrific murder committed by an offender with no prior convictions, may result in a life sentence because no punishment other than the maximum penalty can adequately meet the objectives of retribution, punishment, deterrence, and community protection.

240. To summarise, and without being prescriptive or exhaustive, the following are instances where the weight afforded to an offender’s good character or lack of criminal antecedents might be reduced:

• Cases where a statutory provision applies to deny the offender leniency on account of their good character.

• Cases where the period of previously unknown offending is of such magnitude that the sentencing court cannot or does not find the offender to be a person of good character. These cases are necessarily rare, and the period of unknown offending would need to be considerable before this proposition is engaged. The judgments of the High Court in Ryan v The Queen demonstrate this. The period of offending in Ryan was in the vicinity of twenty years.

• Cases where the offender’s good character or lack of convictions facilitated the commission of the offence. Similarly, cases where an offender’s knowledge, skills, qualifications, expertise or standing in their field allowed greater opportunity to commit the offences. [45] While past case law identifies particular offences where this may apply, it will depend on the facts of the case. Relatedly, cases where the type of offence is one often committed by people of good character or those without convictions. While the authorities identify offences where this consideration may arise, the circumstances in which it will actually apply, will necessarily depend on the facts established by the evidence.

• Cases of such seriousness, or prevalence, that certain objectives of punishment – general deterrence, denunciation, retribution and the like – must play a more dominant role in the balancing exercise.

• Cases where the heinousness of the offence is so extreme that there is little or no scope to mitigate the punishment to be imposed.

  45. R v Anthony James Dickson (No 18) [2015] NSWSC 268 at [114].

242. The cases that establish the foregoing propositions must be applied with caution and discernment. To state what should be obvious, except for those rare cases that fall into the final category described in the last dot point paragraph, it would be unusual for a first offender and/or person of prior good character to a receive the same punishment as an offender who cannot rely on those features. Further, the propositions and categories discussed are often overlapping, and the application of past authority must be applied by reference to the facts and circumstances of the case before the sentencing court. Little is achieved by placing an offence (or offender) into a category and suggesting that a particular consequence will necessarily follow.

Resolution of the ground of appeal

243. The applicant was born in May 1989 and was 27 years of age during the period of the offending. He was 31 at the time of sentence. The only matter on his criminal history was an offence of driving while his licence was suspended from 2008 for which he received a 12 month bond without conviction. He was married with two children aged 2 and 5 and tendered an impressive array of testimonials attesting to his good character. These came from family members, school and family friends, work colleagues and others. He had a solid history of employment including during the period of remand and a letter from the company that employed him, with the knowledge of the pending charges, spoke highly of him. There was no dispute that he was a person of good character and the sentencing Judge, having referred to that evidence, said:

“They all speak of the offender’s good personal qualities. Having regard to that evidence, and his absence of prior criminal record, I accept that prior good character is established.”

244. In the part of his written submissions dealing with “Character and antecedents”, Senior Counsel for Mr Rostankovski submitted before the sentencing Judge:

“79. Whilst prior good character has sometimes been considered to be of less weight in these types of matters, it is of note that the offender's good character was not something that assisted him in the commission of his offences.”

245. Under a heading referring to the “Crimes Act [(Cth)], s 16A(2)(f), (m) and (n) and the Crimes (Sentencing Procedure) Act, s 21A(3)(e), (f), (g), (h) and (i)”, the Prosecutor at first instance submitted:

“78. While it is accepted that he has no criminal record of relevance, good character is of less significance for ‘white collar crimes’ as it is that fact which normally places the offender in the position to offend.”

246. Reference was made to the decision in R v Rivkin (2004) 59 NSWLR 284; [2004] NSWCCA 7 at [410] where it was said:

“410 Subjectively, reliance was placed upon the appellant's position as a person of hitherto impeccable character and integrity, who had not been previously found to have transgressed any law regulating the securities industry, who had played a significant and active role in community and charity organisations, and who was well respected. His Honour did not overlook that circumstance, it being a matter specifically addressed in the reasons for sentence. However, the relevance of good character is of lesser significance for white-collar crimes, since it is that factor which normally places the offender in a position whereby he or she is able to commit the offence: R v El Rashid, NSWCCA 7 April 1995 per Gleeson CJ at 3.”

247. So far as it goes, the passage in R v Rivkin supports the legal principle advanced. However, the present case and the applicant’s circumstances were far removed from those which existed in Mr Rivkin’s case.

248. The Prosecutor went on to submit that “the authorities are clear that prior good character is of little weight in sentencing for offences involving sustained and deliberate taxation fraud, which call for a sentence emphasising denunciation, punishment and general deterrence.”

249. The sentencing Judge accepted these submissions in the passage of the sentencing judgment that underpins the ground of appeal. In the submissions on appeal, the applicant highlighted the passages of the judgment which are said to contain error:

“[137] However, I agree with the Crown’s submission that prior good character has lesser weight for the subject offending. Especially is that so for the aiding and abetting offence since in tax fraud offences, considerations of denunciation, punishment and general deterrence are elevated (Noble v R [2018] NSWCCA 252 at [46]. In relation to the money laundering offence, an offender’s prior good character is of less significance than might otherwise be the case when the activity is engaged in for profit, over a significant period of time and involves a large number of transactions: R v Huang (2007) 174 A Crim R 370 at [36] R v Guo (2010) 201 A Crim R 403 at [89]. In this case, the period of offending was not especially long and although there were numerous transactions, they were not of the number typically associated with ‘structured’ money laundering of substantial enterprises. Nevertheless the point about prior good character assisting in the accumulation of profit by illegal means retains force.

[138] Contrary to the offender’s submission, I find that his prior good character contributed to the commissioning of the aiding and abetting offence (R v Rivkin (2004) 59 NSWLR 284 at [410]; in that, at least, the second tier directors, who the offender was responsible for managing, were unemployed and unsophisticated and, as the Crown submitted, vulnerable to the offender’s manipulation. His prior good character assisted him in that manipulation; which was essential to all of the offences, in differing ways.”

(Emphasis adopted from Applicant Written Submissions at [25]-[26])

250. I accept Mr Rostankovski’s submission that this passage disclosed error.

251. First, there was no evidence to support a finding that Mr Rostankovski’s good character assisted him to commit the offences. Even if that finding was limited to the offence of aiding and abetting the tax fraud (which it was not), the evidence did not support the application of relevant principles allowing for a diminution of the weight to be given to his good character. There was nothing to suggest that Mr Rostankovski’s experience in the industry, his position as a trader, or his good character facilitated his commission of the offence or his interactions with the so called “second tier company directors”. Mr Rostankovski was introduced to those people by a fictitious name (“James”) and, as was submitted, this “shows that he was hardly trading on his good fame, name or character”. Further, the second-tier directors were not innocent dupes or victims of the applicant’s shenanigans. As was put by Mr Walker on the hearing of the appeal “everyone was inside the illicit circle” and the term “second tier directors” was, in the circumstances, “a grandiose expression for people who [understood] that they were to do something that had no substance whatever so far as holding office in the corporation, but to sign when asked and to receive honorariums for no work of any value”.

252. Second, the sentencing judgment did not explain adequately how the offender’s good character and standing assisted him to commit the offences, even if it is accepted that the second-tier directors were “vulnerable to the offender’s manipulation”.

253. Third, the applicant’s role in the organisation was, on the findings of the sentencing Judge, outside of the “inner circle” and he was generally acting at the direction of others. There was nothing to suggest his skills and qualifications, such as they were, let alone his prior good character assisted him in performing the roles he did.

254. The evidence in the present case did not permit the sentencing Judge to conclude that Mr Rostankovski’s good character facilitated the commission of the offences or that it assisted his “manipulation” of the other parties to the tax fraud, let alone the money laundering or blackmail offences. Nor was this a case where the period of offending was of such magnitude that it diminished the evidence of good character in the way suggested by some of the judgments in Ryan v The Queen. I am unable to accept the Director’s submission that the complaint under this ground is ultimately an argument about the “weight” to be given to Mr Rostankovski’s good character. Rather, it is an assertion that a principle of sentencing was misapplied or was applied in circumstances in which it did not properly arise on the evidence.

255. The application for leave to appeal should be granted and the Court must consider the question of sentencing afresh in accordance with the decision in Kentwell v The Queen.

Exercising the sentencing discretion afresh

256. The correct approach to re-sentencing and s 6(3) of the Criminal Appeal Act was described by the High Court in Kentwell v The Queen in the following terms at [43]:

“After having identified specific error of the kind described in House, the Court of Criminal Appeal may conclude, taking into account all relevant matters, including evidence of events that have occurred since the sentence hearing, that a lesser sentence is the appropriate sentence for the offender and the offence. This is a conclusion that that lesser sentence is warranted in law. The result of the Court of Criminal Appeal's independent exercise of discretion may be the conclusion that the same sentence or a greater sentence is the appropriate sentence. In neither case is the Court required to re-sentence. Nor is the Court required to re-sentence in a case in which it concludes that a lesser sentence is appropriate for one or more offences, but that a greater sentence is appropriate for another or other offences, with the result that the aggregate sentence that it considers warranted in law exceeds the aggregate sentence that is the subject of appeal. The occasions calling for the Court of Criminal Appeal to grant leave, allow an offender's appeal and substitute a more severe sentence are likely to be rare. Were the Court to grant leave in such a case, convention would require that it inform the appellant of its intended course so that he or she might abandon the appeal”

257. Simpson J (as her Honour then was) explained this Courts function once error is established in Davis vR [2015] NSWCCA 90 at [79]-[84]:

79. Any sentence that falls within the available range may be said to be “warranted in law”. However, a sentence imposed following a legally flawed sentencing exercise is not “warranted in law” - unless, in the exercise of its independent discretion, the Court of Criminal Appeal determines that that is the appropriate sentence for the offence and the offender.

80. Reliance by the Crown on a contention that “no lesser sentence is warranted in law” is apt to mislead. Unless the contention is that the sentence imposed lay at the bottom of the available range, then the submission is simply wrong. Where the sentence imposed is other than at the very bottom of the available range, some lesser sentence is, as Kentwell makes plain, “warranted in law”. That does not mean that it must be imposed. But the fact (if it be the fact) that the sentence imposed lies within the available range also does not relieve this Court of its obligation to exercise its own sentencing discretion, independently of the sentences selected at first instance.

81. Once error has been identified and this Court is required to re-sentence, a proposition that no lesser sentence is warranted in law is largely irrelevant, and, as I have suggested, apt to mislead. It is apt to mislead because it has the capacity to suggest that this Court ought not to exercise its own independent sentencing discretion, but to take its guidance from the sentence imposed at first instance - a sentence which is, ex hypothesi, legally flawed (even if it is “within range”). To accord primacy to the sentence selected by the sentencing judge, a selection that was based on an understanding of the law now shown to be erroneous, is to deflect this Court from the task it has to perform - which is “a genuine re-exercise of the discretion which extends to all matters relevant to sentencing”: Liles v R (Cth) [2014] NSWCCA 289.

82. The sentence imposed by the sentencing judge continues to have relevance for two purposes. First, should the sentence selected by this Court be more severe than that imposed at first instance, it must inform the applicant that it is giving consideration to increasing the sentence: Kentwell at [43]; Parker v Director of Public Prosecutions (1992) 28 NSWLR 282 at 290.

83. Secondly, the original sentence is relevant to the order the Court makes. Where the sentence the Court would impose is the same as that imposed at first instance, the correct course is, notwithstanding that error is found and leave granted, to dismiss the appeal: Criminal Appeal Act, s 6(3).

84. In my opinion, the practice of the Crown relying on those words in s 6(3) (“no lesser sentence is warranted in law”) ought to cease. The task of this Court, once error is established, is to exercise its own sentencing discretion. Its task is not to ask whether the sentence imposed at first instance as “within range” and, if it is, to re-impose that sentence. That would be an abdication of the responsibility to exercise afresh the sentencing discretion. In the exercise of that discretion, it may or may not come to the conclusion that the appropriate sentence for the offence and the offender is that which was imposed at first instance. That is not the result of concluding that “no lesser sentence is warranted in law”, but the result of an independent consideration of all relevant sentencing factors.

258. Mr Rostankovksi read two affidavits “on the usual basis”, that is, against the possibility that the Court would move to exercise the sentencing discretion afresh:

1. An affidavit of Mr Rostankovski dated 22 September 2021.

2. An affidavit of Jordan Drew Gear, solicitor, dated 22 September 2021.

259. The two affidavits and their annexures provide evidence of the conditions imposed on Mr Rostankovski in custody, including his limited access to recreational and educational facilities, the cessation of in-person visits with friends and family, and the deleterious effects of those conditions on his mental health. Like many inmates, the impact of precautions taken by the authorities to prevent the spread of COVID-19 within the gaol system have made the conditions of incarceration more onerous.

260. Senior Counsel for Mr Rostankovski invited the Court to take into account the favourable findings made by the sentencing Judge with respect to Mr Rostankovski’s subjective case, including:

1. He is remorseful and contrite.

2. He is very unlikely to re-offend.

3. He enjoys good prospects of rehabilitation.

4. He has developed insight into his offending behaviour.

5. The significance of specific deterrence is somewhat diminished.

261. I have taken these matters into account and given appropriate weight to Mr Rostankovski’s good character and lack of criminal record. I have reviewed the evidence tendered on the appeal and given some weight to the onerous conditions of incarceration and Mr Rostankovski’s continued efforts to reform while he has been in custody. His subjective case was, and remains, a strong one. It is entitled to significant weight.

262. Against that, the criminality involved in this case was extremely grave. The facts and relevant findings are set out in some detail in the judgment of the presiding Judge at [43] and following.

263. Mr Rostankovski was involved in aiding and abetting a massive and highly complex tax fraud involving an amount far exceeding one hundred million dollars. He was involved over a period of 6-7 months and during that time around $50 million was generated by the conspiracy. He was aware that the principal of the scheme benefited in a sum of at least $7.5 million of misappropriated funds. Mr Rostankovski profited in an amount of almost $192,000.

264. When he became dissatisfied with his own reward, Mr Rostankovski set about blackmailing the conspirators. The blackmail was carefully planned and executed as summarised by Fullerton J at [54]-[56]. It involved two demands for $5 million and $20 million respectively.

265. The money laundering offence related to the proceeds of the blackmail offence. Almost $25 million was paid into the trust account of Mr Chalabian’s law firm between February and May 2017.

266. Each of these offences represented planned and sophisticated criminality of a very high order. The sentencing Judge was correct to categorise the blackmail and money laundering offences as well above the mid-range for offences of their kind. While I would not disturb the finding made by Judge Abadee, the assessment of the aid and abet offence as being at about the mid-range was generous given the scale of the offending that Mr Rostankovski facilitated.

267. It is unnecessary to express my conclusions as to the appropriate sentence numerically, see: O’Grady v R [2015] NSWCCA 16 at [3] (Bathurst CJ) and the analysis undertaken in RO v R [2019] NSWCCA 183 at [84]-[89] (Beech-Jones J, as his Honour then was) and [118]-[123] (N Adams J). However, having undertaken the exercise afresh, I would have commenced with higher starting points than did the sentencing Judge. I would also have taken a less “generous” approach (to employ the language of the presiding Judge) to the issue of totality in structuring the sentences.

268. In terms of the application of s 6(3) of the Criminal Appeal Act, and despite the specific error established, the result is that no lesser sentence is warranted in Mr Rostankovski’s case. That conclusion applies to the aggregate sentence imposed for the two commonwealth offences, the individual sentence imposed for the blackmail offence, and to the total effective sentence.

269. The total effective sentence (10 years and 5 months with a non-parole period of 7 years and 2 months) imposed by Judge Abadee was, to adopt the words of Simpson J in Davis v R, at “the very bottom of the available range”[46] for criminality of such magnitude.

     46. Davis v R [2015] NSWCCA 90 at [80].

270. For those reasons, while leave to appeal should be granted, the appeal against sentence must be dismissed.

**********

Endnotes

Amendments

10 August 2022 - Names removed from catchwords

09 August 2023 - non-publication order revoked - judgment re-published

09 August 2023 - Names re-inserted in catchwords

Decision last updated: 09 August 2023