R v Holland - [2002] WASCA 265

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : COURT OF CRIMINAL APPEAL

CITATION: R -v- HOLLAND [2002] WASCA 265

CORAM: WALLWORK J
ANDERSON J
FITZGERALD AJ

HEARD: 19 AUGUST 2002

DELIVERED : 20 SEPTEMBER 2002

FILE NO/S: CCA 45 of 2002

BETWEEN: THE QUEEN
Appellant
AND
KARL BRENT HOLLAND
Respondent

Catchwords:

Criminal law - Sentencing - Crown appeal - Fraud upon the Commonwealth - Lodging false tax returns whilst in prison - Co-operation with authorities - Respondent in danger - Had been in prison for some time for other offences

Legislation:

Crimes Act 1914, s 5, s 16BA, s 29B

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellant: Mr P N Bevilacqua
Respondent: Mr A J Maughan

Solicitors:

Appellant: Commonwealth Director of Public Prosecutions
Respondent: Maughan & Leach

Case(s) referred to in judgment(s):

Dinsdale v The Queen (2000) 202 CLR 321
Everett v The Queen (1994) 181 CLR 295
Gladkowski v The Queen (2000) 115 A Crim R 446
Lowndes v The Queen (1999) 195 CLR 665
McKenna v The Queen [1999] NSWCCA 358
Nguyen and Phan v The Queen 86 A Crim R 521
R v Bahntoff, unreported; CCA SCt of Vic; 14 May 1998
R v Boian & Anor (1997) 96 A Crim R 582
R v Cappadona (2001) 122 A Crim R 52
R v Carter (1997) 96 A Crim R 582
R v Kazacos 106 A Crim R 252
R v Sopher (1993) 70 A Crim R 570
Stitt v The Queen (1998) 102 A Crim R 428

Case(s) also cited:

Iskander v The Queen [2001] WASCA 409
Lowe v The Queen (1984) 154 CLR 606
R v Gallagher (1991) 23 NSWLR 220
R v Suarez-Mejia [2002] WASCA 187
R v Tait and Bartley (1979) 24 ALR 473
R v Wright (1994) 74 A Crim R 152

WALLWORK J: These are reasons for judgment after a Crown appeal against the length of sentences of imprisonment which were imposed upon the respondent after he was convicted upon his own pleas of guilty of 210 offences in the District Court at Perth.
The 210 offences were:
(1)16 offences of endeavouring to impose, contrary to s 29B of the Crimes Act 1914.
(2)75 offences of knowingly being concerned in another's endeavour to impose, contrary to s 5 and s 29B of the Crimes Act 1914.
(3)5 offences of imposition upon the Commonwealth contrary to s 29B of the Crimes Act 1914.
(4)114 offences of being knowingly concerned in another's imposition upon the Commonwealth contrary to s 5 and s 29B of the Crimes Act 1914.
The maximum penalty provided for each of the offences was 2 years' imprisonment. Twenty of the offences were contained in an indictment. The balance of 190 offences were set out in a s 16BA Crimes Act 1914 Schedule.
When sentencing the respondent the learned Judge expressed to the view that the effective sentence which was warranted for all the offences was a sentence in the order of 3 years' imprisonment with a period of 18 months to be served before parole. However, his Honour noted that he was required by the Crimes Act to have regard to an undertaking which had been given by the respondent to co‑operate with the authorities concerning some pending prosecutions. His Honour said:
"Having regard to all of the matters I have referred to, I think the criminality is deserving of a sentence of 3 years' imprisonment, to serve 18 months before eligibility for parole. Having regard to the undertaking for co‑operation under s 21E, I reduce the sentence to 2 years' imprisonment with a recognisance release period of 12 months and a commencing date of the 25/12/2001. If he doesn't co‑operate that sentence goes up to 3 years with a minimum of 18 months; if he does co‑operate, he can be expected to be considered for release after 12 months. By then of course he will have served 5 years 4 months in custody for criminal behaviour over the last few years, but nevertheless a long period of time in custody. I propose to structure the sentence as follows: for counts 1, 2, 3 and 4 in the indictment, 6 months' imprisonment on each, all cumulative, making a total of 2 years' imprisonment; in respect of the balance of counts in the indictment, 6 months' imprisonment on each, all concurrent; in respect of the matters the subject of the notice, 6 months on each, all concurrent; starting date 25 December 2001 and a recognisance release. He can be considered for a recognisance release order or release on recognisance after serving a period of 12 months."
His Honour also said:
"I'm told that he was eligible for release on parole with respect to the sentence he was serving previously on 25 December 2001; that's Christmas Day just gone. The Crimes Act requires me really, as I understand it, if imposing imprisonment, which I'm going to do, to backdate it to that date so it would commence on 25 December 2001. I think there was no dispute about that."
The Crown claims that the effective sentence imposed upon the respondent for the criminality involved in all the charges was manifestly inadequate. I will refer later in these reasons to some of the propositions advanced in that regard.

The Law

When considering a Crown appeal a number of propositions are to be borne in mind. In Everett v The Queen (1994) 181 CLR 295 at 306 McHugh J said:
"Defining the limits of the range of appropriate sentences with respect to a particular offence is a difficult task. What is a range in a particular case is a question on which reasonable minds may differ. It is only when a Court of Criminal Appeal is convinced that the sentence is definitely outside the appropriate range that it is ever justified in granting leave to the Crown to appeal against the inadequacy of a sentence. Disagreement about the inadequacy of the sentence is not enough to warrant the grant of leave. Sentencing is too inexact a science to make mere disagreement the criteria for the grant of leave to appeal against the inadequacy of a sentence."
In Dinsdale v The Queen (2000) 202 CLR 321 at [62] Kirby J said:
"For reasons of legal history and policy, the position of Crown appeals against sentence has long been regarded in Australia and elsewhere, as being in a class somewhat different from that of an appeal against sentence by a convicted offender. When first introduced, Crown appeals were considered to cut across 'time honoured concepts' of the administration of criminal justice in common law systems. For this reason it has sometimes been said that, as a 'matter of principle' such appeals should be a comparative rarity. The attitude of restraint reflected in such remarks has often been justified on the basis that a Crown appeal against sentence puts the prisoner in jeopardy of punishment for a second time, a feature that is ordinarily missing from an appeal or application for leave to appeal, brought by those who have been sentenced. The consequence is that where the Crown appeals, it is normally obliged to demonstrate very clearly the error of which it complains. The further consequence is that, where such demonstration succeeds, it is conventional for the appellate court to impose a substituted sentence towards the lower end of the range of available sentences. This convention intends to add an additional restraint upon interference, given the strong resistance that exists against appellate 'tinkering' with sentences."
In Lowndes v The Queen (1999) 195 CLR 665 at 671 ‑ 672 the Justices of the High Court said that:
"…a Court of Criminal Appeal may not substitute its own opinion for that of the sentencing Judge merely because the appellate court would have exercised its discretion in a manner different from the manner in which the sentencing Judge exercised his or her discretion… The discretion which the law commits to sentencing Judges is of vital importance in the administration of our system of criminal justice."

The Appeal

In my opinion the effective sentence imposed by the learned Judge in this case seems to have been very lenient. However, that is not the end of the matter. His Honour had reasons for adopting that approach.
At the hearing of this appeal it was properly conceded by counsel for the appellant that a great deal of assistance had been provided by the respondent to the authorities, which had enabled them to investigate and unravel the large number of offences which had been committed. Counsel advised the Court that the respondent had made available his computer and decoded it to allow the authorities access to all the records he had kept concerning the running of the scheme. These records detailed the claims made and where moneys had gone.
This Court was informed that at the beginning of the investigation the Crown had no idea of the extent of the offences. The Tax Office had found out that some tax refunds were going into the same account when they had been paid to different people. That had alerted the Tax Office that something was amiss. Counsel said that enquiries had then resulted. Computer access was given by the respondent almost immediately, so that the authorities were informed of the details of the scheme very quickly.
With respect to the importance of the respondent's co‑operation counsel for the appellant said:
"… there is no question it was important. It was very important co‑operation. It was extensive. There is also the fact that it was not simply assistance to the authorities, but the respondent put himself in danger. He was giving information in relation to a whole heap of prisoners and he was required to be put into some sort of solitary confinement…"
The 3 year head sentence, before deducting the 12 months for future co‑operation, was arrived at by the taking into account of amongst other things, the early pleas of guilty by the respondent and his past co‑operation; also the fact that he had been in prison for a considerable time for other offences before he was sentenced.
Counsel for the appellant advised the Court that the scheme had commenced when another prisoner had used the respondent's services to obtain funds from the Tax Office. That person had later disclosed to the respondent that the claim was not legitimate. The respondent had done nothing for a while after that and he did not participate in any more of those types of claims. However, eventually he was approached by other prisoners. He had relented and become involved in the scheme. After that he was approached by numbers of prisoners. He agreed to assist them.
It had been submitted by counsel for the respondent to the learned sentencing Judge that the respondent had been prevailed upon by other prisoners and that he had weakened and become involved. The activity had snowballed from there. There was reference made to two occasions when threats were made. However, those two relevant matters were not included as counts in the indictment as the Crown took the view that there was a genuine plea of duress available to the respondent.
The Crown contended that the respondent had exercised control of the scheme and had controlled the payments and movements of money between the various persons involved. He had also made money from the scheme by charging a fee or commission. He had received $61,000 in commissions. It was submitted that he had employed tactics of intimidation and had used debt collectors both inside and outside the prison in order to collect debts which were owing to him.
The nature of the scheme was that the respondent had filed claims containing business details which had been made to look genuine. The papers had also contained false letters from employers in order to give the appearance of genuineness to the claims. Some of the claims had been lodged in other States in order to avoid detection. Until the scheme was uncovered by the Tax Office the respondent had been continuing with it.
It was submitted for the appellant that in relation to five of the offences, the respondent had used other prisoners' details to obtain refunds for himself. Those five offences had related to $45,000, of which $9,600 had been received by the respondent.
The appellant noted that the respondent had told people who wanted to be involved in the scheme that they would be allowed to do so only on the respondent's terms. It was said that the respondent had exercised control over the way in which the scheme was run. He had not been frightened into it. It was however conceded that pressure had been applied to him from time to time by other prisoners.
It was submitted for the appellant that when the whole scheme was looked at, including the amount of control exercised by the respondent, an inference could not be drawn that the respondent had been intimidated into committing the offences by other prisoners.
In his sentencing remarks the learned Judge had said that he thought that the way in which the scheme had evolved was significant. His Honour said:
"The prisoner, who was an accountant, is a large obese man of 33, who cannot be described as a young man; whose demeanour and presentation in Court suggests to me that he would be unlikely, I think, to be able effectively to resist intimidation offered by others. Further, it is not difficult to accept that when it became known that the prisoner had the ability to help other prisoners to defraud the revenue that a large number of inmates were interested in participating. The prisoner realistically, I think, had little chance of withdrawing his services once it commenced, or of refusing to provide them. This aspect very much needs to be borne in mind when focusing on the dimensions of the fraud, in my view."
It was submitted for the appellant that the learned Judge had erred in making the finding that the respondent would have been unlikely to be able to effectively resist intimidation offered by others and that realistically, he had had little chance of withdrawing his services once it commenced, or of refusing to provide them. The appellant contended that these findings were not open on the facts and that the respondent had been in a position to control the scheme and in the main had encouraged it. It was said that he had admitted that this was the case in his interview with investigators; that he had acted to perpetuate the scheme and to ensure that he obtained money for himself as well as others. He had also acted independently, intending to gain money only for himself in relation to five of the offences, using other prisoner's details.
It was conceded that there had been references in the interview to certain threats in relation to the lodging of returns, but those relevant charges had not been proceeded with. It was also conceded that the respondent had told of his taking steps to put barriers in the way of potential offenders, such as by saying "I need a group certificate if you've got one."
Counsel for the appellant submitted that the respondent had been dealing with over 100 prisoners all wanting to make claims and in order to keep things manageable, some limits had to be put on the scheme. In the end it was getting out of control. There were too many people demanding money because they had assumed their returns had been lodged. The respondent had not said that he had only entered into the scheme because he feared for his safety. Rather, he had been caught up in it; it had snowballed. He was doing favours. "He was being Johnnie Goodbloke". He was soliciting occasionally and he was being prevailed upon. Sometimes in his own words "I was happy to do it. They had a wife and kids."
Counsel submitted "I think in the mix there was a bit of everything, but certainly in our submission the counts that we have did not involve intimidation in order for him to lodge the return". Counsel submitted that it would only have taken a phone call to the Tax Office to stop the scheme. The respondent had wanted to keep it going. He was gaining significantly from it both in terms of money and reputation.
It was submitted for the appellant that the sentence was manifestly inadequate due to the fact that there had been 125 prisoners involved, with 210 claims. $1.2 million had been claimed of which $500,000 had been paid out. The respondent had received $61,000 in commissions. He had employed assistance both inside and outside the prison in order to assist in moving moneys around and in debt collection. He had used his professional skill to deceive the Tax Office.
It was submitted that general deterrence had been very important in this case because the tax system is a self‑assessment system in many respects and relies on self‑assessment and the honesty of taxpayers. Offences of that type are very difficult to detect. Additionally, the respondent had already been convicted of tax fraud. He had earlier received a sentence of 3 years 6 months' imprisonment and been ordered to serve 2 years' imprisonment. That had arisen from his activities as a registered tax agent when he had lodged false claims on behalf of clients. On that occasion $146,000 had been lost by the Tax Office. Most of the money had been obtained by the respondent. Whilst on work release from that term of imprisonment, the respondent had committed further offences of dishonesty which had resulted in him being sentenced to a further 6 years' imprisonment. It was while he had been serving the second sentence that he had committed the relevant offences the subject of the present appeal.
On the other hand, it was submitted for the respondent that the respondent had made the earliest possible pleas of guilty. He had given 100 per cent co‑operation in every respect. The learned Judge was sentencing a person who had already served over 4 years in prison. If one‑third had been deducted from an otherwise appropriate sentence to allow for the respondent's early pleas of guilty, past co‑operation with the authorities and the other matters in mitigation, including the circumstances in which the respondent had been asked to commit offences by other prisoners, an approximate starting point before the sentence was reduced to 3 years would have been 4 years 6 months' imprisonment. A further year had then been deducted to allow for the future co‑operation.
Counsel for the appellant referred this Court to other sentences of imprisonment which have been imposed for tax fraud. These included R v Bahntoff, unreported; CCA SCt of Vic; 14 May 1998 where a head term of imprisonment of 8 years was imposed. The offender in that case had received $300,000 for himself. Apart from the $300,000 which had been received by the offender, there had been a further $400,000 claimed which had been cancelled. The $300,000 is to be compared with the $61,000 received by the offender in this case. However, the appellant made the point that the present case had involved over 100 prisoners putting in false returns.
Counsel also referred to McKenna v The Queen [1999] NSWCCA 358 where the offender was sentenced to 6 years' imprisonment with a minimum of 3 years. The Court was told that the offender had received $500,000 himself from the offences. Another sentence was imposed in Stitt v The Queen (1998) 102 A Crim R 428 where the offender received a 5 year 6 months maximum term with a minimum of 3 years 8 months. He had received $600,000 himself from the offence. In Gladkowski v The Queen (2000) 115 A Crim R 446 a sentence of 3 years 3 months was imposed with a minimum of 13 months. The offender had received $350,000. He had tried to obtain a further $200,000. In R v Sopher (1993) 70 A Crim R 570 the offender had received $400,000. He was sentenced to a maximum term of 5 years' imprisonment with a minimum term of 3 years. In R v Boian & Anor (1997) 96 A Crim R 582 the proceeds had involved $1.7 million. The sentence imposed was 6 years' imprisonment with a 4 year 6 months minimum.
It was submitted for the appellant that a pattern of sorts could be seen in the sentences in the abovementioned cases but it was not entirely helpful because the nature of the offending had been different in this case.
It was further submitted for the appellant that the Judge in this case had erred in reducing the 3 year sentence to one of 2 years because of future co‑operation. That co‑operation was related to the giving of evidence in five future trials. It was conceded that a 50 per cent deduction was allowable for co‑operation "all up", which included past co‑operation.

In the course of his submission on this matter, counsel for the appellant said:
"In this particular case the co-operation, even if you give it the full 50 per cent, most of it was past. That's when the respondent had disclosed all the information, uncovered the involvement of all these prisoners, had put himself at risk, had ended himself up in solitary confinement. All of those factors, all of those policy reasons, that justify a significant discount occurred largely prior to the sentencing, and there was future co‑operation left which involved giving evidence at five trials. But in the scheme of things that was fairly minimal to what the respondent had already done, yet he was given in our submission, too high a discount, being 33 per cent for the future co‑operation, if anything, more than half. Without getting into figures too heavily - 80 to 90 per cent of the co‑operation that had already been given should have been taken into account as past co‑operation, and there was a small amount to be taken into account in connection with the future co‑operation."
Against those submissions it had been earlier conceded by counsel for the appellant that the respondent's co‑operation had been very important and extensive. Counsel said:
"There's also the fact that it was not simply an assistance to the authorities but the respondent put himself in danger. He was giving information in relation to a whole heap of prisoners and he was required to be put into some sort of solitary confinement…"
On the question of the respondent's co‑operation with the authorities, it is relevant that he had sixteen interviews with Federal Police officers between 14 September 2000, when he admitted his part in the scheme and said he would co‑operate fully with the police, and January 2001. The learned Judge at the sentencing hearing was informed that during this period a large number of individual offenders and offences were identified. It was put on the respondent's behalf that if he had not opened up the secret part of his computer and co‑operated fully with the police, the authorities would have had significant difficulties identifying a large number of the offences concerned.
At the sentencing hearing the learned Judge had been taken in detail through the decisions of Sopher (supra), Gladkowski (supra), and R v Kazacos 106 A Crim R 252. In Kazacos the Commonwealth was defrauded of approximately $107,000. The offender was sentenced to 4 years' imprisonment with a release order after 15 months. His Honour was also referred to Stitt (supra) and R v Carter (1997) 96 A Crim R 582 where a scheme went on for 3 years and there was an underpayment of tax of $659,719. The offender in Carter was sentenced to 12 months' imprisonment and ordered to be released forthwith on a good behaviour bond. His Honour was also referred to the case of Nguyen and Phan v The Queen 86 A Crim R 521 where tax in the sum of $911,000 was evaded. The offender was sentenced to a total effective sentence of 2 years 6 months' imprisonment to be released after serving 18 months' imprisonment. His Honour was also referred to the decision of Boian (supra) and R v Cappadona (2001) 122 A Crim R 52 where there had been a systematic tax fraud by two offenders involving some $3.5 million. One of the offenders was sentenced to 2 years' imprisonment, reduced to 18 months because of his co‑operation.
Counsel for the respondent submitted that it was not only five future prosecutions which the respondent had offered to assist with, but rather those five and "any related proceedings which may be initiated against other persons for their involvement in those five offences". It was also submitted that it had been the Crown's decision not to proceed against some 100 prisoners concerning whom the respondent had given full and frank disclosure. The fact was that the respondent had co‑operated whenever he was asked by the Crown. He was still ready, willing and able to do that. There was also the question of him serving the rest of his sentence in isolation in a maximum security facility, although he was classed as a minimum security prisoner. The reality of that form of imprisonment is that at the present time he is imprisoned with half a dozen other prisoners who are deemed to be vulnerable. The prisoners concerned do not have the exercise facilities or the educational facilities offered to other prisoners. They are confined to a very small wing in the prison. It is a far more difficult incarceration than the respondent might otherwise have expected.
When sentencing the respondent the learned Judge was fully aware of all the circumstances of the offences. He stated that it was hard to see how the respondent could have done more to co‑operate with the authorities. He had provided 19 separate witness statements and had given evidence on three occasions in Court. He had clearly placed himself at great personal risk as a result of that conduct. His Honour noted that some 16 or so of his "customers" were in prison for homicide and it was obvious that the assistance which the respondent had provided had been to his detriment in the prison setting, not only in terms of risks to his personal safety, but in terms of the need for him to be protected, often by way of isolation from other prisoners.
His Honour noted that the respondent was 33 years of age with two children who did not reside in Perth. He referred to the nature of the

offences, the difficulty of detection and the elaborateness of the scheme. Further, that the respondent had been in prison since January 1997, being a period of over 5 years save for a period of about 8 months. His Honour noted that the respondent's criminal behaviour had commenced in 1996 or thereabouts when, as a result of taking medication to help his battle against a weight problem, he had developed some dependence upon amphetamine‑like substances. When he had ceased taking the medication his addiction had become significant. As a result he had developed a habit with a need for money. That was when his criminal behaviour had commenced.

His Honour referred to previous decisions and said that in some of those cases the offender had benefited as to the total amount himself, which was obviously a significant difference with this case, "but the range was something of the order of 12 months to 8 years and it really does not help an awful lot to look at other sentences."

Conclusion

In my opinion, his Honour was fully aware of all the circumstances of the offences and the principles of sentencing involved. Although his Honour took a very sympathetic view of the respondent, in my view and applying the principles in the decided cases which have been referred to earlier in these reasons, there has been no error demonstrated and the appeal should not succeed.
ANDERSON J: I have had the advantage of reading the reasons for judgment of Wallwork J. I agree that the sentence imposed on the respondent was lenient. The respondent masterminded a tax fraud scheme which involved the submission over the period of about a year of 210 fraudulent tax returns on behalf of 125 fellow prisoners in which fraudulent tax refunds, amounting to $1,279,835 were claimed. A total of $501,327 was refunded pursuant to these fraudulent claims and very little of this is likely to be recovered. The respondent's involvement was not merely to prepare fraudulent returns and submit them on behalf of his "clients". He exercised a sophisticated level of control over every part of the process, including using associates outside the prison and creating bank accounts for the receipt of the refunds. He administered the whole scheme by use of a computer and mobile telephone, and e‑mail banking techniques. He charged fees and commissions and received a total of $61,000 in the 12‑month period. The false returns in respect to which refunds were cancelled or intercepted by the Australian Taxation Office would have yielded at least that much again by way of fees and

commissions had they succeeded. Against those objective facts, a sentence of 2 years' imprisonment with an order for release after serving 12 months on a recognizance to be of good behaviour for 12 months is, as I have said, a lenient sentence, to say the least. I would go so far as to say that from every point of view it is an extremely lenient sentence. However, as Wallwork J has pointed out, there were weighty mitigating factors available to be taken into account. Of these, the most significant are (i) the extraordinary level of co‑operation and assistance which the respondent gave to the investigating agencies as soon as he was discovered and the high level of co‑operation promised for the future to assist the prosecuting authorities in the prosecution of the taxpayers concerned; (ii) the risk to the respondent which he is willing to run that he will suffer retribution at the hands of the taxpayers who have been or are to be prosecuted, they all being convicted criminals, many of whom are serving sentences for serious crimes of violence; (iii) the considerable hardship which the respondent will suffer during his period in custody - until 25 December 2002 - by reason of the security arrangements that will have to be made to keep him safe due to his co‑operation; (iv) the fact that, to the limit of his ability to do so, he has made monetary reparation to the Commonwealth and (v) the fact that this sentence is to be added to the sentence which he was already serving.

Whilst I think that even after taking all these matters into account, the sentence should have been longer, it is not so lenient as to require the intervention of this Court.
I, too, would dismiss the appeal.
FITZGERALD AJ: I have had the advantage of reading the reasons for judgment of Wallwork J. I agree with them and there is nothing I wish to add.