R v Kelly

[2006] NSWSC 1142

CITATION:	REGINA v. KELLY [2006] NSWSC 1142
HEARING DATE(S):	Friday 22 September 2006
JUDGMENT DATE :	3 November 2006
JURISDICTION:	Criminal
JUDGMENT OF:	Hall J at 1
DECISION:	I make a community service order directing the offender to perform community service work as defined in s.3 of the Crimes (Administration of Sentences) Act 1999 for a period of 500 hours. The offender is to comply with standard conditions set out under clause 205 of the Crimes (Administration of Sentences) Regulation 2001.
CATCHWORDS:	Sentencing - plea of guilty to a charge of concurring with a false or misleading statement to obtain financial advantage - s.178BB Crimes Act 1900 (NSW) - offender held position of chief accountant with HIH - relevant sentencing factors pursuant to s.21A, Crimes (Sentencing Procedure) Act 1999 (NSW) - court must not sentence an offender to imprisonment unless satisfied, having regard to all possible alternatives, that no penalty other than imprisonment is appropriate - community service order an appropriate sentence in the circumstances
LEGISLATION CITED:	Crimes Act 1900 (NSW) Crimes (Sentencing Procedure) Act 1999 (NSW) Crimes Legislation Amendment (Periodic and Home Detention) Act 2000 (NSW) Crimes (Administration of Sentences) Act 1999 Crimes (Administration of Sentences) Regulation 2001
CASES CITED:	Regina v. Boskovitz [1999] NSWCCA 437 Regina v. Glenister [1980] 2 NSWLR 597 Regina v. Pantano (1990) 49 A. Crim. R. 328 Regina v. Halabi (CCA, unreported 17 February 1992) Regina v. Corner (CCA, unreported 19 December 1997) Regina v. McKechnie (CCA, unreported 1 October 1987) Regina v. Adler [2005] NSWSC 274 Regina v. Rivkin [2004] NSWCCA 7 Regina v. Williams (2005) 152 A. Crim. R. 548 Regina v. Chu (CCA, unreported 16 October 1998)
PARTIES:	REGINA v. Robert George KELLY
FILE NUMBER(S):	SC No. 2006/1576
COUNSEL:	Crown: P. Roberts, SC/I. Nash Offender: D. Robinson, SC.
SOLICITORS:	Crown: Commonwealth DPP Offender: Access Business Lawyers

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
CRIMINAL LIST

HALL, J.

FRIDAY 3 NOVEMBER 2006

No. 2006/1576

REGINA v. ROBERT GEORGE KELLY

SENTENCE

1 HALL, J.: The offender, Robert George Kelly, entered a plea of guilty in the Local Court on 4 July 2006 to one charge of concurring with a false or misleading statement to obtain a financial advantage contrary to the provisions of s.178BB of the Crimes Act 1900 (NSW).

2 The maximum penalty prescribed for the offence is five years imprisonment.

3 The charge to which the offender pleaded guilty concerns one of the steps taken by HIH Insurance Limited (“HIH”) to conceal the breach of a $200 million covenant from Noteholders in circumstances to which I will shortly refer.

4 The terms of the indictment against the offender were as follows:-

“On or about 26 May 2000, at Sydney in the State of New South Wales, did, with intent to obtain for FAI Insurances Limited (‘FAI’) a financial advantage, namely the avoidance of the risk of calling in of amounts owing under Notes issued by FAI as part of the $150,000,000 Medium Term Note Programme, concurred in the making of a statement to officers of Westpac Banking Corporation, namely words to the effect ‘management of HIH Group is not able to produce consolidated accounts of the FAI Group for the financial period ended 30 June 1999 because the company structure has changed, the accounts cannot be reconstructed and it would be too costly’ which he knew to be false or misleading in a material particular.”

5 On 4 August 2006, the offender was arraigned before Bell, J. on which date he formally entered a plea of guilty. The matter was stood over for sentence to 22 September 2006.

6 The Crown tendered a statement of facts (Exhibit A) and a folder of documents relevant to matters and events concerning FAI Insurance Limited (“FAI”) and, in particular, what is referred to in the statement of facts as the “MTN Programme”.

7 Evidence was tendered on behalf of the offender to which I will refer later in these remarks.

8 FAI, on 30 May 1997, entered into a Domestic and Euro Medium Term Note Programme as Issuer, with Westpac Banking Corporation as agent for the programme. I referred earlier to this as the “BTN Programme”. The MTN Programme had a maximum aggregate face value amount of US$150 million.

9 It was a requirement of the MTN Programme that FAI and its subsidiaries maintained group shareholders funds at or above $200 million. This has been referred to as “the $200 million covenant”.

10 Condition 7.2(k), Events of default, defined a breach of undertakings in condition 7.5 or 7.7. Condition 7.5(a) provided:-

Group Shareholders’ Funds
Group shareholders’ Funds (including minority or outside interests) of FAI and its consolidated subsidiaries will not be less than A$200 million.

11 The subscription agreement containing those conditions was tendered by Mr. Robinson, SC. who appeared on behalf of the offender.

12 In September 1998, HIH made a takeover offer for FAI, then a publicly company listed on the Australian Stock Exchange. The takeover was successful and the acquisition was completed in January 1999.

13 As the statement of facts indicates, the MTN Programme was inherited by HIH when it acquired FAI and its subsidiaries. After the acquisition, FAI became a wholly owned subsidiary of HIH Investment Holdings Limited. That company, in turn, was a wholly owned subsidiary of HIH.

14 Following the acquisition of FAI, the HIH Secretariat is said to have had responsibility for monitoring the MTN Programme and its loan covenants. The Company Secretary, Mr. Fred Lo, had responsibility for the Secretariat. The offender was employed in the Secretariat as Assistant Company Secretary and he reported to Mr. Lo. Mr. Lo, in turn, reported to Mr. Dominic Fodera, Chief Financial Officer, and a Director, in particular, of HIH and FAI. Mr. Fodera, in turn, reported to Mr. Raymond Williams, Chief Executive Officer and who was also a Director, in particular, of HIH and FAI, who reported to their Boards.

15 It was a further condition of the MTN Programme that FAI provide annually to Westpac its group consolidated accounts for distribution to the Noteholders.

16 As observed in the Crown’s submissions (paragraph 4), FAI was in breach of the $200 million covenant and FAI also had not provided its group consolidated accounts. As the Crown has observed, had the Noteholders become aware of the breach of the $200 million covenant, there was a risk to FAI that the Noteholders would have taken steps to secure repayment of monies due and payable under the notes, some US$75 million.

17 On 13 August 1999, the offender sent a memorandum to Mr. Lo which advised him of financial covenants under the MTN Programme, in particular, of the Group Shareholders’ Funds Australian $200 million requirement, and of any Events of Default which could be triggered as a result of the proposed 30 June 1999 year end reporting.

18 A detailed balance sheet prepared by HIH for FAI and its subsidiaries for the year ended 30 June 1999 and dated 7 September 1999, revealed that the Group Shareholders’ Funds of FAI and its subsidiaries was A$80.973 million. Accordingly, it was below the A$200 million requirement under condition 7.5(a) of the MTN Programme.

19 In 2000, the management of HIH, FAI’s then parent company, took a number of steps to ensure that the Noteholders did not become aware of the breach of the A$200 million covenant. It has been noted in the Crown’s written submissions (paragraph 5) that HIH’s Chief Executive Officer, Raymond Williams, and its Managing Director, Terrence Cassidy, had been prosecuted for four offences relating to steps taken after June 2000 to conceal the breach of the A$200 million covenant.

20 In the latter part of 1999 and the early part of 2000, there were ongoing communications between HIH Secretariat and Westpac Hong Kong, whereby Westpac, on behalf of the Noteholders, had sought to obtain the relevant FAI consolidated accounts and an Auditor’s Compliance Certificate.

21 Westpac, in particular, communicated the expressed concerns of Noteholders to HIH, the concerns being as to the information supplied at that time by HIH under the MTN Programme. Thereafter, the offender made enquiries with the Financial Services Division as to whether such accounts were available. Ms. Colleen Chapman of the Financial Services Division advised the offender that consolidated accounts for FAI had not been prepared. She shortly thereafter advised him that since the acquisition by HIH, FAI and its subsidiaries were not required to produce consolidated accounts.

22 HIH sought a waiver of the requirements to produce the consolidated accounts but on or about 26 April 2000, Westpac sent a facsimile to the offender stating that the attempt to seek a waiver for the consolidated accounts and an Auditor’s Compliance Certificate for FAI had not been achieved.

23 The offender was absent on leave in the period 20 April to 2 May 2000. Mr. Lo wrote a note to the offender by facsimile in the following terms:-

“Rob – I think you have to ask FSD to prepare a set of FAI consolidated a/c’s – unless you have other ideas.”

24 On 27 April 2000, Mr. Lo sent an email to the offender stating that he wanted to discuss matters with him when he returned including “FAI consolidated accounts”.

25 In the period 2 May to 22 May 2000, the offender liaised with Ms. Chapman for the purpose of providing FAI consolidated accounts and continued to speak to a Mr. Gary Ho of Westpac Hong Kong, who was continuing to request the accounts. The offender made Mr. Lo aware that Mr. Ho was continually making such requests.

26 On 16 May 2000, the offender sent an email to Ms. Chapman and received a reply from her on 22 May 2000. This advised that the net assets (or Group Shareholders’ Funds) of the FAI Group was A$81 million.

27 Following receipt of this email, the offender went to see Mr. Lo and told him that the net assets (or Group Shareholders’ Funds) of the FAI Group was A$81 million. The offender stated that Mr. Lo told him to organise a meeting with Mr. Fodera and to ask Ms. Chapman to prepare the consolidated profit or loss for the FAI Group by company, as Mr. Fodera may wish to know the loss to 30 June 1999. The offender then sent an email requesting advice as to FAI’s consolidated loss for the 12 months to 30 June 1999. FAI did not at any time after May 2000, following the requests from Westpac Hong Kong for the necessary accounts or the Certificate, provide the necessary accounts or the Certificate.

28 Mr. Lo and the offender met with Mr. Fodera on 24 May 2000. At that meeting, Mr. Fodera was given a copy of Ms. Chapman’s email dated 22 May. He was told that there was a problem with the FAI consolidated accounts for 1999, as the MTN Programme required the FAI Group’s net assets to be A$200 million and its net assets were only A$81 million.

29 Mr. Fodera instructed both Mr. Lo and the offender that:-

“… we will not provide Westpac with a copy of the FAI June 1999 Consolidated Financial Accounts. We will only provide Westpac with the HIH Insurance financial accounts to 30 June 1999 and if Westpac aren’t satisfied with that, we will provide them with some sort of letter of comfort or guarantee. Still try and obtain from the Noteholders approval to alter the agreement to substitute the financial accounts for FAI with HIH’s financial account. Fred, arrange a meeting with Westpac to tell them. Fred, I want you to report back to me after the meeting.”

30 At the last mentioned meeting, Fodera issued an instruction to the offender and to Mr. Lo to advise Westpac that the reason the FAI accounts could not be provided was that it would be too costly to get FAI’s consolidated numbers reconstructed and have the account audited.

31 On 24 May 2000, Mr. Bill Howard, General Manager Finance of HIH had been shown Ms. Chapman’s email to the offender of 22 May. Subsequently, Mr. Howard told Mr. Fodera that he had been speaking to Ms. Chapman and that there was a breach of one of the debt covenants. Mr. Howard said that Mr. Fodera responded “Don’t worry, the issue is in hand. We have started a process at the moment with the Noteholders in regards to the accounts”.

32 On 22 May 2000, Mr. Lo, accompanied by the offender, met Mr. Mark John and Ms. Lucy Chiu of Westpac Sydney. At that meeting, Mr. Lo falsely advised Westpac in words to the effect that HIH could not produce the consolidated accounts of FAI and its subsidiaries, “… because the company structure has changed, the accounts cannot be reconstructed and it would be too costly”.

33 At that meeting, Mr. Lo offered for HIH to provide its own consolidated accounts, in lieu of the production of FAI’s consolidated accounts together with a letter of Letter of Comfort to Noteholders under the MTN Programme.

34 HIH’s consolidated accounts to 30 June 1999 did not disclose the breach by FAI of the undertaking to maintain Group Shareholders’ funds above A$200 million. Additionally, FAI did not provide the Auditor’s Compliance Certificate and it did not remedy the non-compliance after notice from the Agent that the Certificate was required. This potentially constituted an Event of Default.

35 The position, therefore, was that for the year ended 30 June 1999, FAI was exposed to the risk of a Noteholder acting on the occurrence of an Event of Default and presenting the Note to Westpac Hong Kong and the Note becoming due and payable. In that event, the Group was vulnerable to cross defaults in other facilities.

36 Subsequent to 26 May 2000, the offender continued to have some involvement with respect to the FAI MTN Programme. This included acting as a liaison between HIH and Westpac and continuing to progress HIH’s request to have the Noteholders waive FAI’s requirement to produce the consolidated accounts for the financial year ended 30 June 1999.

37 In about August 2000, Ms. Chapman informed the offender that the approximate value of FAI’s Group Shareholders’ Funds as at 30 June 2000 was A$35 million. Accordingly, FAI was also in breach of its undertaking to maintain Group Shareholders’ Funds above the A$200 million covenant for the financial year ending 30 June 2000. There is no evidence that the offender had knowledge of the actions taken which were intended to rectify FAI’s breach for the financial year ending 30 June 2000.

38 After 26 May 2000, the management of HIH continued to ensure that Westpac did not become aware of FAI’s non-compliance with the MTN Programme for the financial year ended 30 June 1999.

39 As at 30 June 2000, the FAI US$75 million MTN Programme was the largest external borrowing of the HIH Group. An event of default under the US$75 million programme was likely to trigger defaults in other HIH banking facilities.

40 By reason of the various events associated with FAI’s breaches in respect of the financial years ending 30 June 1999 and 30 June 2000, the Noteholders were denied the opportunity to consider whether they could, and if so would, exercise their contractual entitlements and take steps with a view to demanding repayment of the whole of the amount then owed pursuant to the MTN Programme.

41 On 15 March 2001, when the Provisional Liquidators were appointed to HIH, the Noteholders had not been repaid any monies the subject of the MTN Programme. Mr. Anthony McGrath, one of the liquidators, stated that as at 31 March 2005, the balance sheet of FAI records the following:-

• Total Assets (not specifically charged) as A$42.755 million.

• Total Liabilities (including MTNs) as A$2.099 billion.

42 Accordingly, any recovery of funds by Noteholders is said to be negligible, at best.

Personal circumstances of the offender

43 The offender is presently aged 51 years, having been born on 2 December 1954. He has no prior convictions. He completed an Accounting Certificate and Diploma in Superannuation and an Executive Development year through the Institute of Chartered Secretaries. From 1971 to 1976, the offender worked as an accounts clerk. His duties included the preparation of monthly financial statements.

44 In October 1976, the offender was employed as an assistant accountant by C.E. Heath Underwriting Agencies Pty. Limited, the precursor of HIH. The offender became the accountant for several broking companies and a vehicle repair company within the C.E. Heath Group. This included maintaining financial records and preparing annual financial statements for the companies.

45 After C.E. Heath Group was floated on the Stock Exchange and changed its name to HIH, the offender became Chief Accountant for the HIH Group. He reported to Mr. Lo in this position.

46 In late 1994, the offender was appointed Personnel and Services Manager within the HIH Group Finance Department.

47 In about July 1999, he was appointed Assistant Company Secretary for HIH Group and September 1999, he was appointed as the Joint Company Secretary for all companies within the group with the exception of HIH.

Subjective circumstances

48 A pre-sentence report from the Community Offenders’ Services Probation & Parole Service written by John Bajda, Probation and Parole Officer dated 28 July 2006 was tendered and became Exhibit 1. The report, in dealing with factors related to the offending, stated:-

“The offender stated that at the meeting described in paragraphs 23 to 25 in the statement of facts … he was aware that the directions given by his superiors were unethical. However, due to his subordinate status, he felt that it would have been inappropriate to express his opinions, particularly as his employment may have been jeopardised.
Mr. Kelly expressed shame at his failure to behave ethically.”

49 The pre-sentence report (p.2) records that the offender does not appear to possess any significant issues in regard to his offending behaviour that requires the intervention of the Probation & Parole Service. He was assessed, as stated in the report, Exhibit 1, that the offender has been assessed as suitable for a Community Service Order in accordance with the provisions of s.86(1) of the Crimes (Sentencing Procedure) Act 1999 (NSW) and that he has signed an undertaking as required by s.86(1)(e) of that Act. It is suggested that if such an order were made, he should report to the Sutherland District Office of the Probation & Parole Service within seven days.

50 The report also states that the offender is eligible and has been assessed as suitable for a periodic detention order in accordance with the requirements of ss.65A and 65B of the Crimes Legislation Amendment (Periodic and Home Detention) Act 2000 (NSW) and s.66(1) of the Crimes (Sentencing Procedure) Act 1999 and that he had signed an undertaking as required by s.66(1)(f) of that latter Act.

51 Tendered at the sentencing hearing were two references, one by Michael Rook dated 1 September 2006 (Exhibit 2) and the other by Mr. Paul Bateman dated 25 August 2006 (Exhibit 3).

52 It is sufficient to say that the testimonial references are based upon extensive professional associations with the offender and attest to his personal qualities, namely, a diligent and meticulous approach to employment responsibilities in relation to financial and superannuation matters and to his past honesty, trustworthiness and responsible discharge of his financial responsibilities and other functions attaching to his former employment. Mr. Bateman has also had a personal and family relationship with the offender in which the offender is said to have demonstrated reliability and honesty. Mr. Bateman has characterised the offence in question as an isolated incident and as not a true reflection of the offender’s character and that he continues to have Mr. Bateman’s full respect and trust.

53 The evidence additionally includes the affidavit of Bradley Maxwell Jones sworn 21 September 2006 annexing a statement signed by him on 28 August 2006. Mr. Jones states that he employed the offender in early August 2004 as an Administration Manager and he continues to be employed in that business in that capacity. Mr. Jones states that he has found the offender to be a reliable, trustworthy, competent and honest person. Notwithstanding that the offender has pleaded guilty to the subject charge, Mr. Jones has stated that he has and will continue to have his full trust and support.

Relevant sentencing factors under s.21A Crimes (Sentencing Procedure) Act 1999

54 The provisions of s.21A require the Court in determining the appropriate sentence for an offence to take into account the aggravating and mitigating factors referred to in the section and any other objective or subjective factor that affects the relative seriousness of the offence.

55 The Crown in its written submissions, addressed the following matters:-

(a) The role of the offender

56 The Crown noted that the offender was accused of concurring with a false or misleading statement made in his presence by his immediate supervisor, Frederick Lo, allegedly at the direction of HIH’s Finance Director, Dominic Fodera.

57 The offender’s role in this respect has been said to bear some similarities to the role played by the offender in Regina v. Boskovitz [1999] NSWCCA 437. In that case, Ms. Boskovitz, a director and senior executive of Linter Group, had made false statements to three banks in relation to certain entries in accounts in order to obtain and maintain credit facilities. The Court, on appeal, accepted that she had acted under the direction of the controller of the company who was described as a dynamic and dominating person. She had received no personal benefit from the offences.

58 The sentence imposed in that case, namely, four years comprising a minimum term of two years and three months with an additional term of one year and nine months, was imposed in circumstances where the offender, herself, had made false statements to the banks and she had pleaded not guilty to the offences.

(b) General deterrence

59 The Crown emphasised that general deterrence is an important element in sentencing for white collar crimes, a term which may be generally applied to the offence here in question, particularly those offences which involve a breach of trust: Regina v. Glenister [1980] 2 NSWLR 597; Regina v. Pantano (1990) 49 A. Crim. R. 328; Regina v. Halabi (unreported, NSWCCA, 17 February 1992); Regina v. Corner (unreported, NSWCCA, 19 December 1997); Regina v. McKechnie (unreported, NSWCCA, 1 October 1987).

60 I accept the Crown’s submission that general deterrence in sentencing in sentencing for white collar crime reflects, in part, the difficulty in the detection of such offences, the high cost in their investigation and the potential for financial damage to the public.

61 In Pantano (supra), Wood, J. (as he then was) (Carruthers, J. agreeing) said:-

“… the commercial world expects executives and employees in positions of trust, no matter how young they may be, to conform to exacting standards of honesty. It is impossible to be unmindful of the difficulties of detecting sophisticated crime of a kind here involved, or of the possibility for substantial financial loss by the public … The element of general deterrence is an important element for sentencing for such offences …”

62 I accept the submission made on behalf of the Commonwealth Director that general deterrence is of importance in the present case.

(c) Criminal records/prior good character

63 There is no doubt that the offender was, prior to the instant offence, a person of good character and who had no prior criminal record. I accept the Crown’s submission that in cases where there is a strong need for general deterrence, courts generally speaking will give less weight to good character and that, in general, in “white collar crime” good character is not a mitigating factor as for other sentences: see Regina v. Adler [2005] NSWSC 274 at [51] per Dunford, J.; Regina v. Rivkin [2004] NSWCCA 7 at [410]; Regina v. Williams (2005) 152 A. Crim. R. 548 per Wood, CJ. at 577, [47] and at 579.

(d) Section 22, Crimes (Sentencing Procedure) Act: guilty plea

64 The Commonwealth Director has acknowledged the offender’s early plea of guilty. In this respect, he entered a plea of guilty when asked to answer the charge before the magistrate. This saved the costs of a trial. It is accepted that his plea demonstrates remorse and further the Commonwealth Director accepts that the plea warrants a discount in penalty.

(e) Section 23, Crimes (Sentencing Procedure) Act: co-operation and assistance provided to law enforcement agencies

65 There was provided at the sentencing hearing a statement concerning the assistance provided by the offender. Whilst the offender initially, on 24 March 2004, denied on oath that he or any other person had been engaged in wrongdoing in relation to the present matter, he, on 5 April 2004, offered to assist with respect to ASIC’s investigations. He has, in fact, provided assistance to ASIC in relation to two investigations including the provision of information that had previously been unknown.

66 The offender provided a witness statement for possible use in relation to proceedings concerning Lo concerning the offence with which the offender has pleaded guilty. He also had provided an undertaking to give evidence in any proceedings against Lo. It is acknowledged that his evidence significantly strengthened the case against that person. Lo pleaded guilty on 6 September 2006 in the Local Court to an offence against s.178BB in relation to the matter. Lo has also pleaded guilty in relation to three other offences for which he was due to be arraigned this month in the Supreme Court. It was anticipated that he would enter pleas of guilty to all matters on the indictment.

67 The provision of assistance by an offender is a matter that it is recognised, in accordance with accepted principle, warrants a substantial discount. In Regina v. Chu (unreported, NSWCCA, 16 October 1998), Spigelman, CJ. specified the discount customarily given in New South Wales for significant assistance is in the range of 20% to 50%.

General matters

68 The Crown has provided a schedule outlining sentences in prosecutions arising from the collapse of HIH. The schedule was made available as providing some assistance in placing the offender’s offence into context.

69 A review of the document in entitled “HIH sentences” permits the following general observations to be made:-

(a) The range of offences in each of the cases, and the cases taken overall, indicated a greater level of criminality than the facts concerning the present matter.

(b) The offences in each matter extended to conduct involving serious species of criminal conduct including the making of corrupt payments (Cooper), the making of false representations and backdating of documents for an improper purpose (Cassidy), acts of dishonesty motivated by personal interest (Adler), the reckless making or authorising the making of false or misleading statements (Williams), dishonest use of position in a senior position, the fact of dishonesty being an element in that offences (Howard).

(c) The offender’s criminality, whilst undoubtedly serious, is well below that of any of the abovementioned offenders who have already been sentenced. He acted in a way which warrants condemnation to the extent that is commensurate with his criminality in the context of his role in having concurred in a false and misleading statement made by Lo, who was senior to him. I have also been required to have regard to the level of criminality associated with his conduct in the context of other HIH prosecutions and sentences imposed in other proceedings.

(d) I have regard, specifically, to the level of assistance provided by the offender. The nature and extent of that assistance has been confirmed in the statement of Alan Turton (Exhibit C) in his confidential statement. The evidence, in that respect, confirms that the offender has assisted in investigations and has made a genuine effort to co-operate and provide assistance in each investigation where he has been interviewed. The material tendered and comprised within Exhibit C does confirm the utility and significance of the assistance provided by the offender and the fact that information provided by him has been independently corroborated. I am of the opinion that the assistance provided by the offender should be classified as assistance of a high order.

70 Senior counsel on behalf of the Crown in oral submissions stated that the Crown’s primary position in the matter was that, although the offence to which the offender had pleaded guilty is serious, “… given the subordinate role of the offender, the purposes of the statement made, the offender’s guilty plea and the assistance to the authorities, the Crown conceded full-time custody is not the only available sentencing option” (t.4).

71 Mr. D. Robinson, SC., who appeared on behalf of the offender, submitted that the Court would have regard to the fact that the criminality involved concurrence with a statement made by a superior directed by Mr. Fodera. It was acknowledged that the offender could not be said to have acted under compulsion to go along with the proposed deception leading to the concealing of the breach and for that the offender bears responsibility at law. Notwithstanding, it was submitted that the offender played a relatively minor role and that the Crown has, in effect, acknowledged as much. However, his responsibility in the matter was duly acknowledged by senior counsel, who characterised it as a failing in his client, properly characterised as a lapse in character.

72 Mr. Robinson submitted, in essence, that, having regard to relevant sentencing considerations and the facts and circumstances of this matter, including those which properly characterise his client’s role, that the Court could consider a suspended sentence or a good behaviour bond as appropriate sentencing options.

73 I have given consideration to the available sentencing options, having regard to the objective criminality, the need for general deterrence, the maximum penalty prescribed for the offence (five years) and to the other matters to which I have referred.

74 I have also had regard to the provisions of ss.3A, 21, 21A, 22 and 23 of the Act. By s.5(1) of the Crimes (Sentencing Procedure) Act, a Court must not sentence an offender to imprisonment unless it is satisfied, having regard to all possible alternatives, that no penalty other than imprisonment is appropriate.

75 I have concluded that a term of imprisonment is not an appropriate sentencing option, having regard to the circumstances in which the offence has been committed and to the particular matters to which I have earlier referred. I have, in reaching that conclusion, hesitated in considering the importance of general deterrence in white collar crimes as I have earlier referred and to the consistent line of authority that emphasises the need for general deterrence to be considered in relation to such criminality. I have, however, concluded that the offence committed by the offender is qualitatively different and of a significantly lower order than other offences in relation to which sentences of imprisonment have been imposed in HIH prosecutions.

76 I am not satisfied, however, that a suspended sentence or a good behaviour bond would adequately reflect the nature of the criminality involved and believe that either of those sentencing options would not properly give effect to general deterrence principles. In those circumstances, I have concluded that I should proceed in accordance with the provisions of s.8 of the Act which provides that instead of imposing a sentence of imprisonment on an offender, a Court may make a Community Service Order directing the offender to perform community service work for a specified number of hours. By reason of the assessment that has been made that the offender is suitable for such an order in accordance with the provisions of s.86 of the Act, it is open for an order of that kind to be made.

77 I, accordingly, am satisfied that:-

(a) The offender is a suitable person for community service work;

(b) it is appropriate in all the circumstances that the offender be required to perform community service work;

(c) that arrangements exist in the area in which the offender resides or intends to reside for him to perform community service work; and

(d) the community service work can be provided in accordance with those arrangements: s.86(1), Crimes (Sentencing Procedure) Act 1999 .

78 I have, in deciding whether to make a community service order, had regard to the pre-sentence report dated 28 July 2006 (Exhibit 1) to which I have earlier referred. I note that upon the making of the community service order, the offender is to report to the Sutherland District Office of the Probation and Parole Service.

79 Pursuant to s.90 of the Crimes (Sentencing Procedure) Act 1999 and s.108 of the Crimes (Administration of Sentences) Act 1999, the offender is required to comply with the standard conditions set out under clause 205 of the Crimes (Administration of Sentences) Regulation 2001.

80 In accordance with the provisions of s.8 of the Crimes (Sentencing Procedure) Act 1999 and Part 5 of the Crimes (Sentencing Procedure) Regulation 2005, I make a community service order directing the offender to perform community service work as defined in s.3 of the Crimes (Administration of Sentences) Act 1999 for a period of 500 hours.

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