R v Tacey

[1994] QCA 367

IN THE COURT OF APPEAL [1994] QCA 367

SUPREME COURT OF QUEENSLAND

C.A. No. 434 of 1993.

Brisbane
[R v. Tacey]
BeforePincus J.A.
Davies J.A.

White J.

T H E Q U E E N

v.

PAMELA MARY EATON TACEY

Respondent

COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS

Appellant

_______________________________________________________________

DAVIES J.A. PINCUS J.A.

WHITE J.

_______________________________________________________________

J udgment delivered 02/03/1994

JOINT REASONS FOR JUDGMENT DAVIES J.A. AND WHITE J. SEPARATE
CONCURRING REASONS OF PINCUS J.A.

APPEAL ALLOWED. SET ASIDE SENTENCES IMPOSED BELOW AND IN EACH CASE SUBSTITUTE A FINE OF 350 PENALTY UNITS ($35,000). THE COURT WILL ACCEPT FURTHER SUBMISSIONS, IF REQUIRED, AS TO TIME TO PAY FINES, AND AS TO APPROPRIATE DEFAULT ORDERS IN EVENT OF NON-PAYMENT. ANY REQUEST FOR TIME TO PAY TO BE SUPPORTED BY AFFIDAVIT DEPOSING TO FACTS ON WHICH IT IS BASED.

_______________________________________________________________

CATCHWORDS: CRIMINAL LAW - OFFENCES AGAINST GOVERNMENT - fraud - non-disclosure of cash takings of business in tax returns - systematic and deliberate fraud initiated and persisted in - fine imposed - whether custodial sentence warranted - mitigating factors - unacceptable risk of stroke if custodial sentence imposed

Crimes Act 1914 (Cth), s. 29D
Counsel:R. Hanson Q.C. with him G. Walsh for the Respondent

J.A. Griffin Q.C. with him I. Erskine for the Appellant

Solicitors:Director of Public Prosecutions for the Respondent

John M. O'Connor & Company for the Appellant

Date(s) of Hearing:4 February 1994

J OINT REASONS FOR JUDGMENT - DAVIES J.A. and WHITE J.

Judgement delivered 02/03/1994

The respondent, on 12 November 1993, pleaded guilty to three counts of defrauding the Commonwealth contrary to s. 29D of the Crimes Act 1914 (Cth). In respect of each of those offences the learned sentencing judge imposed a fine of $6666 making a total fine of approximately $20,000. The maximum penalty for an offence against s. 29D is a fine of 1,000 penalty units ($100,000) or imprisonment for ten years, or both.

The Commonwealth Director of Public Prosecutions appeals against that sentence submitting that the respondent's frauds were serious frauds on the revenue, that there were no substantial mitigating circumstances and that consequently they justified the imposition of a custodial sentence which included a period of imprisonment actually to be served.

The offences in respect of which the respondent was convicted were committed on 31 March 1989, 28 February 1990 and 10 January 1992. At each of those times the respondent was a director of Curtain Wonderland Pty Ltd which carried on the business of the manufacture and sale of curtains and curtain accessories. She was one of two directors of that company, the other being her brother. The company is a trustee for the Tacey Russell Family Trust, the beneficiaries being the members of the respondent's and her brother's families. The business is a very large one. It operates eleven retail outlets in the Brisbane metropolitan area and has distributor stores operating under a franchise style arrangement at the Gold Coast and the near North Coast. Attached to various retail stores were clearance centres, operating independently of the retail stores on a cash only basis selling curtain remnants, off cuts, unwanted ready made curtains and unpopular product lines. The cash takings of these businesses were taken to the respondent and the company's head office on a regular basis. The respondent failed to bring these cash takings to account in the income tax returns of the company for the financial years 1988 and 1989 and only part of them in the financial year 1991. The total of cash receipts not brought to account was $298,000 and the total amount of tax thereby avoided was $114,615.

As the learned sentencing judge pointed out, the respondent's fraud extended over a number of years. His Honour correctly described the fraud as systematic and deliberate and the offences as very serious. They were discovered only when a disgruntled former employee told an officer of the Australian Taxation Office about them. There is no reason to believe that they would otherwise have been detected.

This appeal was argued immediately after R. v. Wright (C.A. No. 432 of 1993, 2 March 1994). Counsel for the appellant was the same in each case and counsel for the respondent in this appeal, by arrangement, sat in court during the hearing of the appeal in Wright. Consequently, the appellant, whilst making much the same submissions in this appeal as he had in Wright, did not refer us again to the previous cases to which he referred and to which we have referred in our judgment in Wright. Accordingly, in these reasons we do not propose to repeat much of what we have said in Wright.

The offences in this case are of the same order of seriousness as those in Wright. Prima facie therefore they call for the imposition of a term of imprisonment and a requirement that the respondent serve part of that term. An argument was addressed to us based on an analogy between this case and Pannam, but as we think that, unless we have not been fully informed of the facts in that case, the decision was wrong for reasons which we have stated in Wright, we need not deal with that submission. It was also submitted to us, in effect, that tax fraud should be treated more leniently than social security fraud. However, for reasons which we have stated in Wright, we reject that argument.

A number of mitigating factors were then referred to, all of which, in our view, should properly be taken into account in imposing sentence First, the respondent, who is 55 years of age and married with a family, has no previous convictions and, as appears from references tendered on her behalf, was of good repute. Secondly, she pleaded guilty during the course of the committal proceedings. It was conceded by the appellant that this plea was timeous and consequently saved the time and expense of a trial. Thirdly, the tax evaded had been paid, together with a penalty of $66,000. There was some dispute as to whether this caused hardship to the respondent. The money to pay these sums was raised by the company selling a property upon which it had intended to build a store, the amount paid then being debited against the respondent's loan account. Without more, and having regard to the trust income over the relevant period ($417,000 in the 1988 year, $644,000 in the 1989 year, $757,000 in the 1990 year and $34,000 in the 1991 year), it is difficult to concluded that this subjected the respondent to any great financial hardship. Nevertheless the payment of these sums should be taken into account in her favour because it made good the loss of government revenue at some cost to the respondent. Fourthly, the respondent and the business had received adverse publicity in consequence of her being charged and convicted for these offences. And fifthly, her future involvement in the business will be restricted by reason of her conviction. See generally s. 16A(2) of the Crimes Act.

It was said on the respondent's behalf, and apparently accepted by the learned sentencing judge, that the payments referred to and the respondent's plea of guilty showed remorse on her part.

Notwithstanding the reference in s. 16A(2)(f)(i) to the former as evidence of contrition, we do not think that inference can properly be drawn. The respondent, when formally questioned by the Australian Federal Police, denied that there were any cash takings which had not been recorded in the company's books and, as she was entitled to, later declined to answer further questions. She initially pleaded not guilty and changed it only during the committal proceedings. We are unable to see any evidence of remorse on her part. No doubt she regretted the consequences of what she had done, but that is not remorse. Nevertheless we propose to take into account in her favour the payment and the plea of guilty for the reasons we have given.

Although all of the matters referred to above as mitigating factors should properly be taken into account in the respondent's favour, they are not sufficient, when taken together, to justify a sentence less than one of imprisonment including a period actually to be served. Indeed, all of the above factors were present in Wright and were it not for the matter to which we are about to refer, we would have found this case indistinguishable from Wright and consequently would have imposed on the respondent a sentence of 18 months' imprisonment with an order that she be released upon giving security by recognisance that she be of good behaviour for two years after serving three months of that term.

The learned sentencing judge received evidence from Dr Ringrose, a consultant physician, who had examined the respondent. In his opinion she had a murmur over the right carotid artery, evidence of hardening of the arteries to the retinae and hypertension not then controlled by medication. She had, he thought, a significantly increased risk of having a cerebro-vascular accident in the form of a stroke or cerebral haemorrhage and also of a heart attack; and there was a significant risk of such an event if she were to go to jail. On that evidence the learned sentencing judge concluded that there was an unacceptable risk, with the stress of prison, that the respondent would suffer a stroke, in consequence of which, we infer, she could die.

It should not be thought that a sentence of imprisonment may be avoided by an offender merely because she or he has a serious illness, even one involving some risk of death. In every case the risk of death or serious deterioration of health must be measured and balanced against those factors which would ordinarily require the imposition of a term of imprisonment. In R. v. Price (N.S.W. Court of Criminal Appeal 60438/93, 2 September 1993) for example the appellant failed in an appeal against a six year sentence with a non-parole period of two years for offences under s. 29D of the Crimes Act 1914 (Cth) on the ground that her age (77) and her state of health (hypertension and ischaemic heart disease with risk of serious deterioration in health) justified a non-custodial sentence. And the appellant's age (71) and poor health (including cardio- pulmonary problems and depression) did not prevent the N.S.W. Court of Criminal Appeal in R. v. Sopher (60278/93, 29 October 1993) from increasing a sentence imposed for offences against s. 29D from four years with a non-parole period of 18 months to five years with a non-parole period of three years. We do not doubt the correctness of either of these decisions. However, in view of the learned sentencing judge' s conclusion in this case that there was an unacceptable risk that the respondent would suffer a stroke if sent to jail, we conclude, though with some hesitation, that the respondent should not be required to serve a term of imprisonment.

Because of the seriousness of the offences, the difficulty in their detection, and the fact that in this case but for the respondent's health we would have required her to serve a term of imprisonment, we think that she should be required to pay substantial fines. We propose therefore to allow the appeal, set aside the sentences imposed below, and in each case substitute a fine of 350 penalty units, that is $35,000.

This will mean that for her crimes the respondent has been
required, in addition to paying the tax evaded,
-to pay penalty tax of $66,000;
-and to pay fines totalling $105,000.

The Court will accept further submissions, if required, as to time to pay the fines, and as to appropriate default orders in the event of non-payment. Any request for time to pay should be supported by an affidavit deposing to the facts on which it is based.

REASONS FOR JUDGMENT - PINCUS J.A.

Judgment delivered 02/03/94

I have read the reasons of Davies J.A. and White J. and agree with their Honours' conclusions.

The reasons I have written in Wright, delivered today, set out my views on some aspects of the problem which arises in these cases: I do not repeat them here.