R v Kertebani - [2010] NSWCCA 221

NEW SOUTH WALES COURT OF CRIMINAL APPEAL

CITATION:
R v David KERTEBANI; David KERTEBANI v R [2010] NSWCCA 221

FILE NUMBER(S):
2008/6219008
2008/6219006

HEARING DATE(S):
17 September 2010

JUDGMENT DATE:
26 October 2010

PARTIES:
Commonwealth Crown - Applicant
David Kertebani - Respondent
David Kertebani - Applicant
Commonwealth Crown - Respondent

JUDGMENT OF:
Simpson J Hoeben J Price J

LOWER COURT JURISDICTION:
District Court

LOWER COURT FILE NUMBER(S):
2008/11/0336

LOWER COURT JUDICIAL OFFICER:
Sorby DCJ

LOWER COURT DATE OF DECISION:
16 February 2010

COUNSEL:
Mr N Adams - Commonwealth Crown
Mr J Agius SC -Applicant/Respondent

SOLICITORS:
Commonwealth Director of Public Prosecutions - Commonwealth Crown
Uther Webster & Evans - Applicant/Respondent

CATCHWORDS:
CRIMINAL LAW - offences contrary to the Commonwealth Criminal Code 1995 - obtaining a financial advantage by deception - sentence appeals by Crown and offender - application by offender to adduce fresh evidence - whether circumstances special and unusual - whether Crown appeal revealed latent error - in offender's application whether sentencing judge misunderstood objective seriousness of offence - whether sentencing judge erred in failing to have adequate regard to the effect on offender's family of his imprisonment.

LEGISLATION CITED:
Crimes Act 1914 (Commonwealth)
Crimes (Appeal and Review) Act 2001 (NSW)
Criminal Code Act 1995

CATEGORY:
Principal judgment

CASES CITED:
Director of Public Prosecutions (Commonwealth) v De La Rosa [2010] NSWCCA 194
House v The King (1936) HCA 40; (1936) 55 CLR 499
R v Ashton (2002) 137 A Crim R 73
R v Edwards (1996) 90 A Crim R 510
R v Ehrenburg (NSW CCA, 14 December, 1990 unreported)
R v Glyn Morgan Jones; R v Anthony Joseph Luis Hili [2010] NSWCCA 108
R v Herrera (unreported, 6 June 1997)
R v Maslen and Shaw (1995) 79 A Crim R 199 at 209
R v Smith 44 SASR 587 at 588
R v Wirth (1976) 14 SASR 291

TEXTS CITED:

DECISION:
Respondent’s application to adduce fresh evidence is refused.
Crown appeal against sentence is dismissed.
Respondent’s application for leave to appeal against sentence is granted but the appeal is dismissed.

JUDGMENT:

IN THE COURT OF
CRIMINAL APPEAL

2008/6219008
2008/6219006
SIMPSON J
HOEBEN J
PRICE J
Tuesday, 26 October 2010

R v David KERTEBANI
David KERTEBANI v R

Judgment

SIMPSON J: I agree with Hoeben J.
HOEBEN J: On 5 December 2008 in the District Court at Sydney the respondent pleaded guilty to one charge of obtaining a benefit by deception pursuant to s 134.2(1) of the Criminal Code Act 1995 (Commonwealth) (“the Code”). The maximum penalty for an offence under this section is imprisonment for 10 years.
The respondent also admitted to one other offence against s400.4(1) of the Code, i.e. dealing with the proceeds of crime, and asked that that offence be taken into account by the Court in passing sentence pursuant to s16BA Crimes Act 1914 (Commonwealth).
The respondent came before Sorby DCJ for sentence on 16 February 2010. His Honour sentenced the respondent to a term of imprisonment for 2 years (16 February 2010 to 15 February 2012), to be released after 14 months on 15 April 2011 upon entering into a recognizance, self, in the sum of $1, with a condition that the respondent be of good behaviour for a period of 10 months. His Honour also made a reparation order pursuant to s21B Crimes Act 1914 in the sum of $307,555.
Factual Background
The respondent was a builder and was involved in the construction of residential and commercial properties. In November 2005 the respondent had received an assessment from the Australian Tax Office (ATO) asserting a liability of $970,000. The respondent needed assistance to prepare objections to this assessment.
He was introduced to a co-offender, Mr Dwayhi, as a person who could assist and advise him about his tax issues. At the time Mr Dwayhi was a Compliance Verification Officer with the ATO. His function was to substantiate and process Business Activity Statements (BAS) lodged by ATO clients. Mr Dwayhi told the respondent that he could assist him with the objections to the assessment, but that he would need to be paid. Mr Dwayhi told the respondent that he could help him get money by processing false BAS’s which would result in GST refunds and that the respondent could use that money and pay part of it to him.
Mr Dwayhi instructed the respondent on how the lodgements should be carried out and what he would do once the BAS’s were lodged with the ATO. Mr Dwayhi advised him that he had done this before and that there would be no difficulties as he would process everything himself and if there were an audit, the respondent would just have to pay the money back.
The first false BAS was lodged on 4 January 2006 on behalf of a company which was formerly controlled by the respondent’s brother. The second false BAS was lodged on 9 February 2006 on behalf of another company (Daedel (NSW) Pty Limited) (Daedel).
The scheme involved fictitious purchases by the two companies. The respondent falsely claimed proposed expenditure of some $5.7 million. This involved fictitious expenditure incurred by the first company for $3,050,000 and fictitious purchases by Daedel of $2,684,530. Had this expenditure been genuine, the relevant companies would have been entitled to GST refunds from the ATO. During the relevant period, neither company made any purchases.
Mr Dwayhi corruptly used his position with the ATO to improperly process the two false BAS’s which had been lodged by the respondent and in doing so facilitated the deception. As a result of the deception, a total of $494,669 was paid by the ATO into two accounts to which the respondent had access. The respondent admits that he paid $130,000 to Mr Dwayhi.
The fraud was subsequently discovered by the ATO as part of its internal quality assurance audit. The quality assurance audit is a process whereby a random BAS which had previously been verified by an ATO Compliance Officer is selected and scrutinised by a panel of ATO officers.
When one of the fraudulent BAS’s was selected by the quality assurance audit at the end of February 2006, the respondent and Mr Dwayhi unsuccessfully attempted to conceal the fraud from the ATO by creating an elaborate paper trail to demonstrate that the first company had purchased real property to the value of $3,050,000. This involved the respondent registering a shelf company and then arranging for this company to lodge a fictitious BAS with the ATO. In fact no such purchase was made. The respondent admitted to deriving a benefit of approximately $307,555. At the time of sentencing, no part of this money had been repaid.
Sentence Proceedings and Remarks on Sentence
The sentence proceedings took place over three days (14 August, 27 November 2009 and 16 February 2010). The respondent and his wife gave evidence. At the time the respondent’s three children were aged 6, 5 and 14 months.
It was the evidence of the plaintiff’s wife that she relied upon the respondent emotionally “to survive, to live” as well as financially. She explained that this was because she was effectively cut off from both his family and from her own family. Her evidence on this issue on 14 August 2009 was:
“Q. Do you think to some extent David has taken the position in your life of the support you might get from your own family?
A. He's all - I have nobody but him. We've always been close since I was a young girl, been best friends, we started off as friends – we started dating when I was 17. We were married when I was 21. He’s all I have been – he is all I know. I have no other family.
Q. Do you have a view about whether any of your siblings would be in any position to help you on a regular basis if David were incarcerated fulltime?
A. The relationship with my siblings – like I said, due to the family histories we have a lot of anger between us all. We are a large family, yes, and we all mean well but when we’re together it’s always conflicts, there’s always fighting, there’s always – and we’re not close in that means, so we go very long periods without seeing each other, and everybody lives their own lives, and there’s no real connection there.
Q. And I think you are in a position when one of your – where your sister, I think, is minding your children so that you could come to court?
A. I had to ask her to take a day off work to come, yeah and
Q. Are you in any way – do you have any real expectation, or any expectation at all that you could get anything like daily, or even weekly assistance from any of your family?
A. I have no-one.” (T.66)
Two reports setting out the results of psychological assessments of the respondent’s wife by a Ms de Torres were placed before the Court. In the first of those reports (30 June 2009) the following presenting history was recorded:
“Dianne presented at my clinic with a tearful and anxious demeanour. She reported having troubles sleeping and eating due to stress. Dianne reported that she was under a lot of pressure due to the legal matters which her husband, David Kertebani, was dealing with. She stated that she was experiencing fears about how they would cope emotionally if he went to prison. Dianne stated that she was also worried about how her three sons would cope with the separation, particularly her eldest Anthony, (aged six years), who suffers from separation anxiety and stuttering related distress. Dianne stated that she had been consistently under stress since her parents’ separation in 2003 which gave rise to severe family conflict resulting in the dissolution of her family of origin and that she had suffered from post-natal depression subsequent to the birth of her second son, Jonathan (aged five years). Dianne stated that she was now so depressed and anxious about the future that she has often recently experienced suicidal ideation although she has no immediate plan or means available to her to act on these ideas. Dianne is currently experiencing severe depression and anxiety with suicidal ideation which may become more serious if her primary support, her husband David, is given a custodial sentence.”
The psychologist’s assessment and recommendations in that report were as follows:
“Dianne Kertebani was assessed using a clinical interview in her initial two sessions and found to be experiencing Major Depression as well as having some indicia of Post Traumatic Stress Disorder. The profound stress which she has been suffering in recent times has severely exacerbated these conditions to a critical point …
In summary, Dianne experiences an array of symptoms and interactions which demonstrate a life experience of a complex and traumatic nature. She is currently experiencing a Major Depressive Disorder which requires ongoing medication and therapy and which puts her at risk of hospitalisation or self-harm if she is not given the appropriate support. Her reliance on her husband, David, for emotional and financial support is critical since she has no extended close network of family or friends to rely on. Her powerful capacity to disassociate from her affective state increases the risk of her serious symptoms may be overlooked. In the light of this, if her husband is given a custodial sentence the risk to the well being of Dianne and, by association, her children is increased to acute status.
It is recommended that Dianne seek ongoing psychological or psychiatric treatment of these issues and for ongoing support. It is also recommended that Dianne is given access to family support agencies should her husband be given a custodial sentence. It is also recommended that she have a full assessment of her medication to ensure that dosage and medication are offering the optimal remediating effects possible.”
In a report dated 19 November 2009 Ms de Torres described the respondent’s wife’s presentation as follows:
“Since I saw Dianne in June 2009 her mental state has deteriorated considerably. Dianne found it impossible to contain her fear and distress at the prospect of coping with her three young boys and managing financially if her husband receives a custodial sentence … Since first seeing Dianne in June her depression has worsened and is not being adequately ameliorated by anti-depressant medication. Dianne’s dissociative coping strategies have also intensified which decreases her capacity to cope with day to day life adequately and puts her and her children at risk of serious emotional trauma. Dianne has formerly expressed suicidal ideation and, given her traumatic history, it is essential that she is provided with adequate treatment and support to prevent her state worsening in the event of her husband receiving a custodial sentence.”
In that report, the psychologist’s assessment was almost identical to that in the June report except that the major depression was described as “worsening”. Ms de Torres’ recommendations were as follows:
“It is considered essential that Dianne have her medication reviewed by a psychiatrist to improve her mental state. A referral was made by me to Dr S Roberts, psychiatrist, when I saw her last for this purpose. It is also considered essential that Dianne receive ongoing psychological support if her husband receives a custodial sentence. It is also recommended that Dianne be given access to family support agencies should her husband be given a custodial sentence. If Dianne’s husband is given a custodial sentence, I would consider Dianne at high risk of a worsening of her mental state with a corollary impact on the children.”
The respondent gave evidence about his background. He was born in April 1975 to Lebanese parents, being the eldest of four children. He migrated to Australia with his parents in the 1970’s. He described his family as being close and supportive. He married in 1999 and as previously indicated has three children. He described his relationship with his wife as close, although he said that she had been under a severe strain since he admitted committing this offence.
The respondent obtained his higher school certificate in 1993, went to TAFE and obtained a diploma in Applied Science (Building) in 1996. He had been working as a self-employed builder since 1998. At the time when he gave his evidence his business had failed and he had been made bankrupt.
Reports from two psychologists were tendered on his behalf. The effect of those reports was that due to his business difficulties and legal problems, he had become “highly depressed and anxious with fearful ruminations centred on separation from his family should he go into custody and consequent inability to support them financially”. One of the psychologists said:
“[The thought of incarceration] would only serve to exacerbate his current symptomatology and he would constitute a serious suicide risk.”
In his evidence the respondent accepted that what he had done was wrong and offered no excuse. He said that he took full responsibility for his actions and would not do anything like that again in the future. He said that he would repay the money if given the opportunity and would advance the sum of $54,000 which he was due to receive on a subdivision project to repay the ATO.
His Honour assessed the offence as objectively serious. He noted that the offence was not only a fraud against the ATO but a fraud against all other tax payers. Since the BAS system was based upon honesty and mutual trust, this offence struck at the heart of that process. The total loss suffered by the ATO as a result of the offence was significant, i.e. $494,669.
His Honour had regard to the maximum sentence of 10 years which reflected the seriousness with which the legislature regarded such crimes. His Honour considered that general deterrence for an offence of this kind was an important consideration particularly because the offence was so hard to detect.
His Honour also had regard to the planning which had accompanied the offence, particularly when before it had been detected by the quality assurance audit and the respondent and his co-offender had tried to substantiate the false BAS by creating an elaborate paper trail.
His Honour referred to the subjective factors affecting the respondent and his wife, with particular reference to the psychological evidence. His Honour accepted that the respondent was genuinely remorseful for his offending. His Honour noted that the respondent had no previous convictions.
Although the respondent did not plead guilty at the first opportunity but only after a trial was aborted on 21 October 2008 and after plea negotiations, his Honour accepted that there was still a utilitarian value in his plea and allowed a discount of 15 percent for that plea.
His Honour had particular regard to “the plight of the offender’s family, particularly his wife, and the hardship that will result to her and her three children if the offender were to receive any form of custody”. His Honour set out part of the respondent’s wife’s evidence and summarised its effect. He also quoted passages from the reports of the treating psychologist, Ms de Torres. His Honour took into account the provisions of s16A(2)(p) of the Crimes Act 1914 (Com) and its requirement that the sentencing judge take into account the probable effect of any sentence on a person’s family. In applying s16A(2)(p) his Honour had regard to what this Court said in R v Herrera (unreported, 6 June 1997):
“Section 16A(2)(p) of the Crimes Act 1914 requires the Judge to take into account the probable affect that any sentence under consideration would have upon the prisoner’s family or dependants. That provision does no more than reflect the common law, which says that hardship to a prisoner’s family operates in mitigation only where it is sufficiently extreme, beyond the sort of hardship which inevitably results for a family when a parent is incarcerated, to warrant a non-custodial sentence.”
Having taken those matters into account, his Honour concluded at ROS 5.4:
“In the light of this evidence, and all the medical evidence tendered, which I have carefully read I do not consider that the hardship the offender’s family will suffer constitutes “extreme” hardship. There are both family and other support mechanisms that can be put into place to assist Mrs Kertebani and her children, and also I have reached this conclusion by taking into account the facts of this offence set out earlier, and the degree of criminality involved in the offence.”
Appeals
The Crown appealed against the sentence on the basis that it was manifestly inadequate.
The respondent sought leave to appeal on the following two grounds:
Ground 1: The learned sentencing judge erred in failing to impose a sentence that took into account ameliorating features to the objective circumstances of the offence; namely
(a)          Pressure from an unjustifiable taxation assessment;
(b)          Mr Kertebani’s lack of intention to act illegally; and
(c)          Mr Kertebani’s endeavours to withdraw from the illegal enterprise.
Ground 2: the learned sentencing judge erred in failing to impose a sentence that took into account the subjective circumstances of the offence; namely the effect of a fulltime sentence of imprisonment on Mr Kertebani’s wife, Dianne Kertebani and their family.
In support of his application for leave to appeal, the respondent sought leave to adduce and rely upon fresh evidence. This fresh evidence related to the state of his wife’s health and comprised two reports of Matthew Jones, psychiatrist, 24 August and 30 August 2010 and a further report from the psychologist, Ms de Torres of 10 August 2010.
Consideration – Application to Adduce Fresh Evidence
The Court decided to consider the fresh evidence application before hearing the sentence appeal.
In making his application to adduce fresh evidence, the respondent relied upon the following statement of principle by King CJ in R v Smith 44 SASR 587 at 588:
“The proper purpose of fresh evidence on an appeal against sentence is to bring before the Court facts which were in existence at the time of the imposition of sentence but were not known to the sentencing judge or to explain facts which were before the sentencing judge so as to put them in a new light. It was not open to the Court of Criminal Appeal to intervene upon the basis of events which have occurred since the imposition of sentence, R v O’Shea (1982) 31 SASR 129 and fresh evidence is therefore not receivable to establish the occurrence of such events. …
While the evidence sought to be admitted on this appeal in a sense establishes the occurrence of events occurring after the passing of sentence, it does so for the purpose of explaining the full extent and implications of the appellant’s condition of health which existed at the time of sentence. I think that the authorities show that it is permissible to have regard to events occurring after sentence for the purpose of showing the true significance of facts which were in existence at the time of sentence.”

The respondent submitted that the recent reports of Dr Jones and Ms de Torres while dealing with events which had occurred after the passing of the sentence were admissible for the purpose of showing the true significance of the evidence which was before the judge at the time of sentence.
In Smith the sentencing judge had been aware that the offender had been diagnosed with the HIV virus and that although he was asymptomatic at that point in time, it could worsen. By the time the matter came before the South Australian Court of Criminal Appeal, the virus had become symptomatic and the offender was in a serious state of ill health. For the above reasons, the South Australian Court of Criminal Appeal allowed the evidence to be adduced.
The respondent also relied upon R v Ehrenburg (NSW CCA, 14 December, 1990 unreported) and R v Ashton (2002) 137 A Crim R 73 as other illustrations of the application of this principle. In Ehrenburg there was expert evidence before the sentencing judge that the offender suffered from conditions which could cause damage to her unborn child. After a short period of imprisonment, the offender prematurely gave birth to a child who was deformed and required a great amount of ongoing medical attention. In Ashton the sentencing judge was not aware that the offender had any psychological disorder as he had not been diagnosed with any such disorder. After sentence had been passed, the offender’s psychiatrist noticed that he was psychotic, paranoid, depressed and possibly suicidal. In both those cases the court had regard to the “fresh evidence”.
In making this submission the respondent accepted that evidence of this kind would only be admissible in an appeal against sentence where the circumstances were “special” or “unusual” (Ehrenburg at 7 and 8, Ashton at 77). In Ehrenburg Loveday J, with whom Gleeson CJ and Samuels JA agreed, said:
“In must be stressed, however, this is a most unusual case. It would be unfortunate if the special facts and circumstances of this case, which I regard as borderline, were to be regarded as a general precedent for the review of a sentence by this Court in the light of subsequent events.”
Nevertheless, the respondent submitted that the present circumstances did constitute such a special case in that the evidence sought to be adduced established a sharp decline in his wife’s mental state since his incarceration.
In order to assess this submission, it was necessary for the Court to examine for itself the evidence sought to be adduced. The Crown was granted leave to cross-examine Ms de Torres and Dr Jones.
I would not allow the respondent to rely upon the “fresh” evidence which he seeks to adduce. I do not regard the evidence as being in any way “special” or “unusual”. In particular the evidence does not in the sense set out in Smith and Ehrenburg “explain the full extent and implications of the appellant’s condition of health which existed at the time of sentence”.
The reports of Dr Jones went no further than to diagnose the respondent’s wife as suffering from a major depressive disorder of considerable severity and to opine that her condition would significantly be impacted upon if the respondent’s sentence were to be increased. Dr Jones thought that the continued or extended incarceration of the respondent was likely to be a significant exacerbating factor for her continuing depression and would increase the risk of her engaging in self-harm or suicide.
The report from Ms de Torres said that the respondent’s wife was experiencing a worsening major depression which put her at risk of hospitalisation, self-harm or suicide if she were not given the appropriate support. It again stated that her reliance on her husband for emotional and financial support was critical. It concluded:
“I would suggest that Dianne is at an ever-increasing risk to her wellbeing and that of her sons the longer she is without the support of her husband.”
These are the very matters which were set out in considerable detail in the reports of Ms de Torres which were before the sentencing judge. Those reports stated in unambiguous terms that the respondent’s wife’s depressive condition would probably worsen if he were incarcerated. This has now happened. The more recent report of Ms de Torres and that of Dr Jones add little if anything to the expressions of opinion which were before the sentencing judge. They do not get close to the “special” circumstances which arose in the cases of Smith, Ehrenburg and Ashton to which the Court was referred.
If there were any doubt on that issue, it was resolved in the course of cross-examination. In answer to questions from Price J the following evidence was given by Ms de Torres.
“Q. If the sentence remained the same you would recommend that she be referred to a – I’m sorry, you would notify the Community Mental Health team?
A. If the sentence remains the same I don’t know if her condition would worsen. I think maybe her mood would improve if there was no lengthening of the sentence. I’m not sure. I’m not sure about the sentences though. I just know she hasn’t – if she has any disappointment in terms of getting access to her husband then that increases her risk proportionally.
Q. Do I take it that you do not consider that if her sentence - if the sentence remains the same that her condition would worsen?
A. If she is expecting to see more of her husband and that is disappointed her condition would worsen. To whatever degree that happens that will make it proportionally worse. So she's just very fragile and any further shock or disappointment would just make her more fragile, that's all I'm saying. So it depends on what her expectations are around that but as I haven't spoken to her recently I couldn't say what her expectations are right now. (T.22.5)
As that evidence makes clear and as the recent reports confirmed, the anticipated deterioration in the respondent’s wife’s psychological condition has occurred. It is unlikely to worsen unless there is some increase in the respondent’s sentence. The “fresh” evidence sought to be adduced does not advance the respondent’s case any further than that which was before the sentencing judge. In other words, even if the respondent were allowed to adduce that evidence, it would only marginally, if at all, advance his prospects of success in his appeal against sentence.
Crown Appeal
It was accepted by the parties that s68A of the Crimes (Appeal and Review) Act 2001 (NSW) also applies to the determination of a Crown appeal against sentence where an offence under the Code is involved (Director of Public Prosecutions (Commonwealth) v De La Rosa [2010] NSWCCA 194). The effect of s68A is that the Court may not dismiss a Crown appeal against sentence because of double jeopardy considerations or in the event that the appeal is allowed, impose a lesser sentence than would otherwise be appropriate because of those considerations.
The Crown submitted that while it was unable to identify any specific error in his Honour’s remarks on sentence, the conclusion which his Honour arrived at and the sentence which was ultimately passed, demonstrated latent error in that the sentence was outside the appropriate range of sentences for this offence. In particular, the Crown submitted that the sentence failed to adequately reflect the objective criminality of the offence and failed to adequately reflect the principle of general deterrence for offences of this nature.
The Crown referred to the following matters which were relevant to the objective seriousness of the offence.
(a)          The offences involved deliberate planning.
(b)          The scheme was sophisticated.
(c)          The loss to the ATO was substantial.
(d)          The offending extended over a period of six weeks.
(e)Further planning was involved when the respondent and his co-offender Dwayhi attempted to conceal the fraud when the quality assurance audit identified one of the fraudulent transactions.
The Crown submitted that these matters placed the offence in the mid-range of seriousness for offences of this kind. Approached in that way, the Crown submitted, the sentence passed did not give adequate weight to these factors nor did it have adequate regard to the maximum sentence fixed by the legislature for this offence.
On the issue of general deterrence the Crown relied upon the observations of Rothman J in R v Glyn Morgan Jones; R v Anthony Joseph Luis Hili [2010] NSWCCA 108 at [13] where his Honour said:
“13 Of late, procedures for the filing of income tax returns have been relaxed and much greater emphasis has been placed upon self-assessment. Such a process reposes on the taxpayer a heavy duty of honesty. The practical restrictions on the capacity of government to apprehend offenders for every offence necessarily requires that the legislature and the courts ensure that deceitful conduct, in a commercial enterprise, once discovered, is appropriately punished. Deterrence looms large.”
As the Crown conceded, his Honour specifically referred to all of these matters. He carefully analysed the circumstances of the offence and specifically referred to the factors relied upon by the Crown. His Honour appreciated the importance of general deterrence in this sentencing process by not only specifically referring to it but by making observations similar to those of Rothman J in Hili. No criticism can be made of his Honour’s process of reasoning or methodology.
While the respondent’s dishonesty was clear and acknowledged by him, it was significant that the respondent’s initial approach to the co-offender Dwayhi was entirely innocent. The instigator of the fraudulent scheme was at all times the co-offender Dwayhi. What the Crown submissions failed to take into account was the respondent’s strong subjective case. This was a matter to which his Honour gave careful attention in his reasons. This was the respondent’s first offence. The consequences for both him and his family were serious. The respondent was genuinely remorseful and contrite, had pleaded guilty and was unlikely to ever offend again. There were health issues affecting the respondent and in a general sense, regard could be had to the effect of his incarceration on his family and his wife’s health.
Any appeal against sentence (whether by the Crown or the offender) is an appeal against an exercise of discretion and will be successful only on one of the well known bases for interfering with an exercise of discretion. The Court’s task is to correct error and not to substitute one exercise of discretion for another, where error has not been shown. In such circumstances error must be either identifiable or manifest from the sentence imposed: House v The King (1936) HCA 40; (1936) 55 CLR 499.
In my view his Honour’s exercise of discretion in this matter has not miscarried. While it is fair to say that the sentence passed by his Honour was towards the bottom of the range of sentences available, it was not outside the range. This is not one of those situations where the sentence imposed was out of the range of sentences that could have been imposed and therefore error must have occurred even though it was not possible to identify it. Accordingly, I would dismiss the Crown appeal.
Respondent’s application for leave to appeal against sentence
Ground 1
The respondent submitted that the basis for this ground of appeal was that his Honour had failed to take into account his submissions concerning the objective circumstances of the offence.
The first matter which the sentencing judge was said not to have adequately considered was that the original taxation assessment by the ATO of $970,000 was subsequently found to be in error and was reduced to something closer to $200,000.
The next matter was that the respondent had not intended to act illegally when he first approached the co-offender Dwayhi but had sought legitimate assistance. It was only later that he had been persuaded to participate in the fraud for his and Dwayhi’s own benefit.
Finally, it was submitted that when the respondent sought to withdraw from the illegal enterprise after the quality assurance audit had identified one of the fraudulent transactions, Dwayhi had refused to assist him and had refused to refund the $130,000 which he had received.
Apart from the respondent’s initial approach to Dwayhi being for a legitimate purpose (which his Honour expressly noted) I do not see how the other matters would have assisted the applicant even if his Honour had specifically referred to them. The fact that the respondent had received an income tax assessment which was subsequently shown to be excessive could not justify or explain his decision to participate in the fraudulent enterprise, the subject of the offence. It does no more than provide the context or background which led to the respondent approaching Dwayhi. There are legitimate procedures available to tax payers to contest wrongful assessments which the respondent ultimately and successfully availed himself of.
It is not correct to say that the respondent engaged in the fraudulent transactions substantially for Dwayhi’s benefit. It is clear from the Agreed Facts that not only did the respondent receive substantial moneys from the transactions but he applied those moneys for his own benefit.
Similarly, I do not see how the respondent’s attempt to withdraw from the illegal enterprise after it had been detected by the ATO’s quality assurance procedures is a mitigating consideration. The respondent was doing nothing more than seeking to avoid the consequences flowing from the fact that the fraudulent transaction which he had engaged in, had been discovered.
It follows that his Honour’s failure to specifically advert to those matters could not and did not adversely impact upon his Honour’s process of reasoning which led to the sentence ultimately passed. This ground of appeal has not been made out.
Ground 2
The respondent submitted that his Honour erred by not finding that this was a case of exceptional circumstances in that the effect of his incarceration on his wife and children was such that a non-custodial sentence should have been imposed.
The respondent submitted that the evidence was all one way: - that his wife’s dependence upon him was total, that she had a fragile mental state and that there was a lack of any other support available for her and her children if a fulltime custodial sentence was imposed. The respondent referred to the references of a risk of suicide and self-harm.
The respondent’s submission somewhat overstates the effect of the evidence before the sentencing judge. While it is true that those matters were raised, the concluding remarks and recommendations of Ms de Torres as to future management need to be kept in mind. These are set out at [16] and [18]. They note a referral to a psychiatrist, they recommend ongoing psychological support and they recommend access to family support agencies. Implicit in those recommendations is the availability of such support mechanisms for the respondent’s wife.
As his Honour appreciated, the test to be discharged by the respondent required the existence of exceptional circumstances. In R v Maslen and Shaw (1995) 79 A Crim R 199 at 209 Hunt CJ at CL said:
“It is only in circumstances where the hardship upon a prisoner’s family is exceptional that it will operate in mitigation; the hardship must be sufficiently extreme – go beyond the sort of hardship which inevitably results to a family when the breadwinner is incarcerated – that a “sense of mercy or of affronted common sense imperatively demands that [the sentencing judge] should draw back”.”
In R v Edwards (1996) 90 A Crim R 510 Gleeson CJ, with whom James and Ireland JJ agreed, applied the formulation drawn from R v Wirth (1976) 14 SASR 291 at 295-296 that it is only in “highly exceptional” circumstances that a court should be “much influenced” by the hardship that an otherwise justified term of imprisonment would cause to third parties.
The task before his Honour was to assess the evidence of both the respondent and his wife and the reports from Ms de Torres. He then had to determine whether that assessment reached the standard of exceptional circumstances. His Honour’s final determination involved a balancing of matters of fact and degree which his Honour was best positioned to make. I am not persuaded that his Honour erred in finding that exceptional circumstances had not been made out. This ground of appeal therefore fails.
The orders which I propose are as follows:
(1) The respondent’s application to adduce fresh evidence is refused.
(2) The Crown appeal against sentence is dismissed.
(3)The respondent’s application for leave to appeal against sentence is granted but the appeal is dismissed.
PRICE J: I agree with Hoeben J.
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LAST UPDATED:
26 October 2010