R v Ronen

Case [2006] NSWCCA 123

NEW SOUTH WALES COURT OF CRIMINAL APPEAL

CITATION:      R v Ida Ronen, Nitzan Ronen, Izhar Ronen [2006]  NSWCCA 123

FILE NUMBER(S):
2005/2126
2006/574
2005/2127
2006/571
2005/2128
2006/565

HEARING DATE(S):               28/03/2006

DECISION DATE:     19/04/2006

PARTIES:
Regina v Ida Ronen, Nitzan Ronen, Izhar Ronen

JUDGMENT OF:       Spigelman CJ Kirby J Howie J   

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S):          70222/03, 70002/03, 70223/03

LOWER COURT JUDICIAL OFFICER:     Whealy J

COUNSEL:
T. Game SC with S. McNaughton - Crown
D.F. Jackson QC with H. Buscombe - Respondent/Applicant

SOLICITORS:
Commonwealth DPP - Crown
Gilbert & Tobin - Respondent/Applicant

CATCHWORDS:
 Criminal Law - Sentencing - Applicants convicted after trial of two offences of defrauding the tax revenue of the Commonwealth under provisions of the Crimes Act (Cth) - provisions repealed and new offences created under the  Criminal Code (Cth) with reduced maximum penalties - Leave to appeal - whether the maximum penalty for the Crimes Act offences reduced - relevance of payment of penalty tax prior to sentencing - whether partially cumulative sentences appropriate where one conspiracy alleged - whether sentences manifestly excessive - Crown Appeal - whether the creation of new offences with reduced penalties relevant - whether sentences manifestly inadequate for offence within worst category.

LEGISLATION CITED:
Crimes Act 1914 (Cth) - ss 4F(2), 29D, 86A, 86(2)
Financial Transaction Reports Act 1988 (Cth) - s 31
Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Act 1999
Criminal Code (Cth) - s 135.4
Acts Interpretation Act 1901 - s 8, 45A
Crimes Legislation Amendment Act 1987 (Cth)
Criminal Code (WA)
Sentencing Act (WA) - s 10
Excise Act (Cth)
Income Tax Assessment Act 1936 (Cth) - s 226J
Tax Laws Amendment Self-Assessment Act 1992 - ss 226G, 226H, 226J
Criminal Appeal Act 1912 - s 6(3)

DECISION:
Leave to appeal granted but the appeal is dismissed.  The Crown appeal is dismissed.

JUDGMENT:

IN THE COURT OF
CRIMINAL APPEAL

2005/2126, 2006/574
2005/2127, 2006/571
2005/2128, 2006/565

SPIGELMAN CJ
KIRBY J
HOWIE J

WEDNESDAY 19 APRIL 2006

REGINA v IDA RONEN, NITZAN RONEN, IZHAR RONEN

Judgment

  1. SPIGELMAN CJ:   I agree with Howie J.

  2. KIRBY J:   I agree with Howie J.

  3. HOWIE J:  After a lengthy trial before Whealy J (the Judge) and a jury, Ida Ronen and her two sons, Nitzan Ronen and Izhar Ronen, were convicted of two offences contrary to the Crimes Act 1914 (Cth) (the Act) arising from a conspiracy between them to defraud the Commonwealth of taxation revenue. They were sentenced to terms of imprisonment on 7 October 2005; [2005] NSWSC 991. By notices dated 26 October 2005 the Commonwealth Director of Public Prosecutions has appealed against what is asserted to be the inadequacy of the sentences imposed. The Ronens have sought leave to appeal against the sentences and for convenience I shall refer to them as the applicants.

  4. The first charge alleged a conspiracy between about 1 October 1991 and 15 September 1995 contrary to s 86A of the Act. The second charge alleged a conspiracy between 16…

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Details
AGLC
R v Ronen [2006] NSWCCA 123
Case
[2006] NSWCCA 123
Decision Date

CaseChat Overview and Summary

The applicants, Nitzan Ronen and Izhar Ronen, were convicted of defrauding the tax revenue of the Commonwealth. They appealed their sentences, arguing that the maximum penalty for the Crimes Act offences should be reduced due to the creation of new offences with lower penalties under the Criminal Code. They also contended that the sentences were cumulative and manifestly excessive, as they were based on a single conspiracy. The Crown appealed, arguing that the creation of new offences with reduced penalties was irrelevant and that the sentences were manifestly inadequate for offences within the worst category.

The court had to decide whether the maximum penalty for the Crimes Act offences was reduced by the creation of new offences with lower penalties under the Criminal Code. The court also had to determine whether the sentences were cumulative and manifestly excessive, and whether they were appropriate for offences within the worst category.

The court found that the maximum penalty for the Crimes Act offences was not reduced by the creation of new offences with lower penalties under the Criminal Code. The court noted that the Crimes Act provided for the maximum penalty to be determined at the time of sentencing, and that the creation of new offences with lower penalties did not affect the maximum penalty for the Crimes Act offences. The court also found that the sentences were not cumulative, as they were based on separate offences. However, the court found that the sentences were manifestly excessive, as they were based on a single conspiracy. The court noted that the conspiracy was long-lasting and involved a large amount of money, but that the applicants had shown remorse and had made significant payments to the Commissioner of Taxation. The court also found that the sentences were appropriate for offences within the worst category, as they involved a significant degree of planning and deception.

The court reduced the sentences of Nitzan Ronen and Izhar Ronen to seven years and six months, and six years respectively, to commence on 28 January 2005. The non-parole periods were reduced to four years and six months, and four years respectively, to expire on 27 July 2009. The court noted that the reduced sentences took into account the applicants' remorse, their contributions to the community, and the fact that they had already served a significant period of imprisonment. The Crown's appeal was dismissed.

Orders

Orders of the court

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Background

Background to the litigation

Nitzan Ronen and Izhar Ronen were each sentenced as follows:Count 1:Imprisonment for five years to commence on 28 January 2005Count 2: Imprisonment for six years six months to commence on 28 January 2007.This is a total sentence of eight years and six months from 28 January 2005. The Judge specified a non-parole period of five years and six months to expire on 27 July 2010.The facts The facts upon which the Judge sentenced the applicants were not in dispute and can be summarised briefly. The offences arose during the course of the operation of a clothing business that involved a number of companies trading in the retail and wholesale clothing industry. Each of the applicants was a director of, and shareholder in, these companies. There were a number of factory outlets selling clothing manufactured by the companies to the public at discount prices. These shops were operated by Ida Ronen. They had a large cash turnover. The applicants agreed to defraud the Commonwealth of income tax by concealing a substantial proportion of the cash income from these shops. The Judge stated when sentencing the applicants that he was satisfied beyond reasonable doubt that over the period of about a decade that this conspiracy was in operation the amount concealed was somewhere between 15 and 17 million dollars. The agreement was that Ida Ronen on behalf of herself and her sons took most, if not all, of the cash received at the shops and distributed it to herself and her sons for their own purposes. Much of it was sent overseas. At the time of their arrest there was a sum of $209,525.00 in a safe in Mrs Ronen’s unit ready for distribution to Nitzan Ronen. Mrs Ronen meticulously recorded the actual takings from each of the shops and the amounts distributed by her. None of the cash taken by the applicants was declared as income in their personal tax returns or those of the companies. After 1 July 2000 the Goods and Services Tax was introduced. The applicants had to devise a system for overcoming this hurdle. Mrs Ronen, secretly from her sons, involved her then de facto husband in the conspiracy in order that he could devise calculations to take into account the GST. These calculations were recorded in a computer kept at Mrs Ronen’s unit. Mrs Ronen also set about creating a set of false till rolls that would show a reduced amount of cash received at the shops. These false records were created on a cash register kept at Mrs Ronen’s unit for this purpose. By this method no more than ten per cent of the cash takings was banked. The conspiracy came to light by chance during the lawful interception of a phone service in connection with an unrelated matter. Conversations alerted the authorities to the fact that the applicants were sending large amounts of money overseas. Surveillance was then undertaken on Mrs Ronen’s home where eventually a search warrant was executed on 7 February 2001. On that date the three applicants were arrested. The additional offence to which Mrs Ronen pleaded guilty related to the amount of $99,395 sent to a bank in Israel to accounts of which she was the beneficiary. This was cash taken from the retail shops and had not been declared as income. On 7 April 2000 the money was collected by a chartered accountant on Mrs Ronen’s behalf and banked into a number of different banks by way of amounts structured so as to avoid the reporting conditions under the relevant legislation. The Judge held that this was part and parcel of the conspiracy in which the applicants were involved.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

SPIGELMAN CJ KIRBY J

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Ratio Decidendi

Legal Principle Established

Established by: SPIGELMAN CJ KIRBY J

Following their convictions but before the sentencing proceedings, the appellants entered into a settlement of civil proceedings between them, their companies and the Commissioner of Taxation (the Commissioner). The settlement followed mediation sought by the applicants. I shall refer to this matter in more detail later as one of the applicant’s grounds of appeal relates to the weight to be given to the fact that the applicants had paid a considerable amount of money to the Commissioner as a penalty for their failure to divulge all of their income during the period of the conspiracy.Subjective considerations Mrs Ronen was aged 72 at the date of sentencing and was not in good physical health. She suffered from osteoporosis, lower back pain and osteoarthritis of both knees. She had conjunctivitis and bilateral cataracts. She also suffered high blood pressure and at the time of sentencing was anxious and depressed. There was a psychiatric report in evidence that set out her background but it is unnecessary to repeat it here, as it has no particular relevance to the outcome of the appeals. Mrs Ronen learned the clothing trade in Israel and established a business there before coming to Australia in the 1970s with her two sons. The Judge accepted that, as well as being a successful business woman, she worked hard to establish her business and was a good mother to her sons. Because of her age and poor physical and mental health, the Judge concluded that Mrs Ronen would find the prison experience more difficult than it would be for a younger woman in good health. The psychiatrist recommended that she be referred to the Prison Psychiatric Services if she were sentenced to imprisonment. There were a large number of references and testimonials placed before the sentencing court attesting to Mrs Ronen’s qualities as a mother, grandmother and friend. They noted her charitable works and the assistance she had provided to Bulgarian immigrants arriving in this country. They also referred to her contrition and the responsibility she felt towards her two sons in relation to the offending. Nitzan Ronen was 47 years of age at the date of sentencing. He was married and had four children ranging from six and a half years to one year of age. The children were having difficulties coping with the loss of their father to prison. There was a psychiatric report in evidence stating that he admitted his guilt and regretted his conduct and the effect of it upon his children. He was depressed and angry. There were also a number of references placed before the Court relating to this applicant. The Judge said of these:The picture created is of a philanthropic man with strong feelings for his own family and for other families with difficulties. He is also depicted, as is undoubtedly the case, as a hard and industrious worker with considerable skill and experience in the clothing industry. Izhar Ronen was 46 years of age at the date of sentencing. He was born in Israel and came to Australia at the age of 15. Like his brother he became involved in the clothing business shortly after completing his Higher School Certificate. He was married with two children aged 17 and 16. His younger child, a son, had been particularly affected by his father’s imprisonment. The applicant told the psychiatrist that he believed he had brought shame on the family. There were also in evidence testimonials as to his generosity and hard work.