Samarakoon v The Queen
[2018] VSCA 119
•11 May 2018
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCR 2017 0238
| ARJUNA SAMARAKOON | Applicant |
| v | |
| THE QUEEN | Respondent |
---
| JUDGES: | BEACH and NIALL JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 23 April 2018 |
| DATE OF JUDGMENT: | 11 May 2018 |
| MEDIUM NEUTRAL CITATION: | [2018] VSCA 119 |
| JUDGMENT APPEALED FROM: | DPP (Cth) v Samarakoon (Unreported, County Court of Victoria, Chief Judge Kidd, 4 October 2017) |
---
CRIMINAL LAW – Sentence – Appeal – Two charges of dealing with money reasonably suspected of being proceeds of crime contrary to s 400.9 of the Criminal Code Act 1995 (Cth) – One charge of attempting to dishonestly obtain a financial advantage by deception from a Commonwealth entity contrary to ss 11.1(1) and 134.2(1) of the Criminal Code Act 1995 (Cth) – Whether accused’s subjective knowledge or belief relevant to sentencing for absolute liability offence – Whether sentencing judge failed to consider comparable cases – Whether sentence manifestly excessive – Leave to appeal refused.
---
| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr M Gumbleton | Halperin & Co Pty Ltd |
| For the Respondent | Ms S Thomas | Ms A Pavleka, Solicitor for Public Prosecutions (Cth) |
BEACH JA
NIALL JA:
On 4 October 2017, the applicant, on his plea of guilty to three charges against the Criminal Code Act 1995 (Cth), was sentenced by a judge of the County Court as follows:
Charge on indictment Offence Maximum penalty Sentence Commencement 1 Dealing with money reasonably suspected of being proceeds of crime less than $100,000 [Criminal Code s 400.9(1A)] 2 years’ imprisonment or 120 penalty units or both 5 months’ imprisonment 4 May 2020 2 Dealing with money reasonably suspected of being proceeds of crime more than $100,000 [Criminal Code s 400.9(1)] 3 years’ imprisonment or 180 penalty units or both 12 months’ imprisonment 4 August 2019 3 Attempting to dishonestly obtain a financial advantage by deception from a Commonwealth entity [Criminal Code ss 11.1(1) and 134.2(1)] 10 years’ imprisonment 29 months’ imprisonment 4 October 2017 Total effective sentence: 3 years’ imprisonment Recognisance release order Release of the applicant after serving 18 months of the term of imprisonment upon the applicant giving security by recognisance of $5000 to be of good behaviour for 3 years. Pre-sentence detention declaration Nil
The applicant has applied for leave to appeal against sentence on three proposed grounds. Two of those proposed grounds allege specific error in the sentences imposed for charges 1 and 2. The third proposed ground alleges that the individual sentences and the total effective sentence are each manifestly excessive.
For the reasons that follow, we would refuse leave to appeal.
The circumstances of the offending
Each of the charges arose from income tax returns lodged in respect of two companies: Balancing High Pty Ltd (‘Balancing High’) and IT Connect (Aust) Pty Ltd (‘IT Connect’).
At the time that the income tax returns were lodged, companies could take advantage of a Research and Development Tax Incentive to offset costs associated with undertaking research and development. Companies would self-assess their eligibility for this incentive, register with AusIndustry and submit claims as part of their income tax returns. In certain circumstances, the Australian Taxation Office (‘ATO’) would issue refunds in respect of claims.
Balancing High and IT Connect lodged income tax returns in which claims were made for research and development expenses. At the relevant times, the applicant was a public officer of Balancing High and a director of IT Connect. The lodgement of the income tax returns was completed by a Tax Agent Portal assigned to a Bruce Simmons.
The ATO subsequently conducted audits and concluded that the research and development expenses claimed by Balancing High and IT Connect had not in fact been incurred.
The particular circumstances surrounding each of the three charges are set out below.
Charge 1
On 7 February 2013, Balancing High lodged an income tax return for the financial year 2011/2012. There was a claim for research and development expenses of $422,050. The ATO credited Balancing High with a refund of $189,922.50. This amount was offset against other tax liabilities and the residual sum of $71,271.28 was transferred into an account of Balancing High.[1]
[1]This figure is taken from the prosecution opening on the plea and differs slightly from the figure cited by the judge in his reasons for sentence: see Commonwealth Director of Public Prosecutions v Arjuna Samarakoon [2017] VCC 1426 [8] (‘Reasons’). Nothing turns on this difference.
Between 20 and 21 February 2013, a total of $21,100, being a portion of the residual sum credited to Balancing High, was transferred and received into accounts controlled by the applicant. The relevant transfers were as follows:
(a) on 20 February 2013, $1,500 was transferred to an account in the applicant’s name;
(b) also on 20 February 2013, $17,600 was transferred to an account in the name of another company, to which the applicant was a third party signatory; and
(c) on 21 February 2013, $2,000 was transferred to another account in the applicant’s name.
This was the conduct the subject of charge 1, being the charge of dealing with money reasonably suspected of being proceeds of crime valued at less than $100,000.
Charge 2
On 6 January 2014, Balancing High lodged an income tax return for the financial year 2012/2013. There was a claim for research and development expenses of $799,550. The ATO credited Balancing High with a refund of $359,797.50.
On 19 February 2014, the sum of $400,000, including the entire sum of the refund issued to Balancing High, was transferred into an account in the applicant’s name. On 20 February 2014, $300,000 was transferred from this account into a mortgage loan account, also in the applicant’s name.
This was the conduct the subject of charge 2, being the charge of dealing with money reasonably suspected of being proceeds of crime valued at more than $100,000.
Charge 3
On 14 March 2014, IT Connect lodged an income tax return for the financial year 2012/2013. There was a claim for research and development expenses of $495,211.21. Three days earlier, an application for registration for the Research and Development Tax Incentive had been lodged with AusIndustry.
The ATO credited IT Connect with a refund of $222,844.95. However, the payment of this refund was suspended pending an audit process. At this time, an audit was also being conducted into the taxation affairs of Balancing High.
During the ATO audit in relation to IT Connect, the applicant supplied tax invoices which purported to substantiate the research and development claim. On 16 May 2014, the applicant supplied a number of tax invoices purportedly issued by three entities. The entities confirmed to the ATO that they had never issued the invoices.
The applicant also had a conversation with a Denis Crema, a director of one of these entities, in which he asked Mr Crema to tell the ATO, if they contacted him, that the invoices had been paid. It became common ground on the plea that this conversation probably occurred after 14 March 2014 (being the date the income tax return was lodged).
The applicant subsequently supplied many more documents to the ATO relating to IT Connect’s claim.
The applicant’s conduct in attempting to obtain the refund was the subject of charge 3, the charge of attempting to dishonestly obtain a financial advantage by deception from a Commonwealth entity.
The applicant was not formally interviewed in relation to the charges brought against him, although he did have some recorded conversations with the informant. No allegations were put to him during these conversations. The applicant did not volunteer any information during these conversations about the false nature of the documents that he had supplied to the ATO.
The judge’s reasons for sentence
The judge commenced his reasons for sentence by describing the circumstances of the offending and relevant legal principles established by intermediate appellate authorities.[2] Before us, neither party took issue with his Honour’s summary of those principles.
[2]Reasons [1]–[21].
Relevantly, in relation to the money laundering charges (charges 1 and 2), his Honour said that the quantum of money involved is ‘the primary identifier of the maximum penalty.’[3] His Honour noted that knowledge of the source of funds will generally increase the seriousness of an offence, but knowledge was not an element of the offence to which the applicant had pleaded guilty.[4]
[3]Ibid [20].
[4]Ibid.
The judge noted that he had considered current sentencing practice, including the cases referred to by the parties during the plea hearing, particularly with respect to charge 3.[5]
Gravity of the offending
[5]Ibid [22].
The judge said that the applicant’s offending on charge 3 was serious, involving an attempt to obtain a very significant sum of money.[6] His Honour observed that the offending was ‘not an opportunistic, spur of the moment misjudgement’, and that the applicant’s conduct during the ATO audits ‘confirms a certain determination on [his] part to give effect to [his] fraud and reveals a certain attitude … towards [his] offending’.[7]
[6]Ibid [24].
[7]Ibid [26].
In relation to the money laundering offences, the judge said it was difficult to assess the gravity of the offending because of an issue surrounding the applicant’s state of mind. Counsel for the applicant had argued that the applicant had an ‘innocent state of mind’ because he believed the transfers represented repayments of a loan made to Balancing High by Samarakoon Investments Trust. [8]
[8]Ibid [27].
His Honour observed that there was ‘an objective or impersonal element’ to the money laundering offences which did not depend on the subjective knowledge or belief of the applicant as to whether the money was proceeds of crime.[9] In pleading guilty to the offences, the applicant was to be taken to have accepted that it was reasonable to suspect that the money was proceeds of crime. The applicant was also to be taken to have accepted that he could not make out the defence provided by s 400.9(5), which is available to an accused who establishes that he or she had no reasonable grounds for suspecting the money was proceeds of crime.[10]
[9]Ibid [28].
[10]Ibid.
The judge was not satisfied on the evidence that the applicant believed that the transfers represented legitimate loan repayments.[11] Nevertheless, his Honour said that the applicant should not be sentenced ‘on the unfavourable basis that [he] had knowledge as to the illicit source of the funds.’ His Honour stated that he would sentence the applicant ‘upon the bare elements of the offences.’[12]
[11]Ibid [29]–[30].
[12]Ibid [31].
The most significant objective fact informing the gravity of charge 2 was said to be the quantum of money involved, which was ‘significantly over the threshold amount of $100,000.’[13] His Honour referred to the fact that the applicant had personally obtained the benefit of the funds, with the money being ultimately transferred into a mortgage account in the applicant’s name.[14] Although charge 1 related to a smaller amount of money, that money was also transferred into accounts controlled by the applicant.[15]
[13]Ibid [32].
[14]Ibid.
[15]Ibid [33].
After dealing with the gravity of the applicant’s offending, the judge embarked on a detailed consideration of factors personal to the applicant that were put by him in mitigation.
Personal circumstances
At the time of sentencing, the applicant was 38 years of age. He had been born in Sri Lanka and moved to Melbourne in 1999. He had been engaged in study and employment since he arrived in Australia.[16]
[16]Ibid [34], [40].
In 2004, the applicant incorporated Balancing High and became a director of that company. Balancing High had some financial success, but there were problems caused by the bankruptcy of a major client in around 2008. The applicant ceased acting as a director in 2011, but continued as a public officer.[17] In 2013, the applicant was appointed a director of IT Connect.[18]
[17]Ibid [42].
[18]Ibid [43].
The applicant married in 2013. He and his wife both experienced health problems. His wife underwent surgery for endometriosis in 2013. The applicant contracted dengue fever in 2014, which rendered him bedridden for some time.[19]
[19]Ibid [44]–[45].
In early 2014, the applicant’s wife fell pregnant with twins but she later miscarried one of the babies. She returned to Sri Lanka for the remainder of her pregnancy and for a time after the birth.[20] The applicant’s daughter was born in November 2014 with heart problems. She spent some time in intensive care. This was an anxious time for the applicant and his wife, although his daughter’s condition had resolved by October 2015.[21]
[20]Ibid [46].
[21]Ibid [47].
The applicant’s parents still lived in Sri Lanka and were in poor health.[22] The applicant’s older brother, whom the applicant ‘idolised’, had died in 1995 as a result of a gunshot wound.[23] The applicant had three sisters and was close to one in particular, whohad been diagnosed with multiple sclerosis.[24]
[22]Ibid [36].
[23]Ibid [38].
[24]Ibid [37].
Counsel for the applicant relied on a report by a clinical psychologist, Jenny Markos, in which it was said that the applicant had been ‘overwhelmed’ by work and personal pressures at the time of the offending and that this had resulted in ‘flawed and careless’ decision making.[25] The judge accepted that the applicant’s conduct could be explained to some extent by stressors in his life and by trauma issues stemming from the death of his brother. However, his Honour said that this did not adequately explain why the applicant had engaged in the conduct that was the subject of charge 3. His Honour observed that ‘[o]n no view was this behaviour merely careless.’[26]
Application of Verdins principles 5 and 6
[25]Ibid [50].
[26]Ibid [51].
The judge noted that Ms Markos had diagnosed the applicant with mental health conditions, namely depression and anxiety and post-traumatic stress disorder. His Honour accepted that the applicant’s mental health conditions would make his experience of custody more burdensome and that Verdins principle 5 was therefore enlivened.[27]
[27]Ibid [52]–[57].
The judge also accepted that the applicant would experience a high level of stress and anxiety in prison, partly on account of his mental health issues. However, his Honour was not satisfied on the evidence that there was a serious risk of imprisonment having a significant adverse effect on the applicant’s mental health.[28]
[28]Ibid [58]–[60].
Delay
The applicant’s counsel indicated that there had been a delay between the ATO audits disallowing the applicant’s claims (in February 2015) and charges being laid (in June 2016). His Honour said he would take into account this period of delay and the impact that it had had on the applicant.[29]
Extra-curial punishment
[29]Ibid [61]–[63].
The applicant’s counsel relied on a number of matters in combination to establish that he had been subject to extra-curial punishment.
First, the applicant had been harassed by two individuals, who had made menacing calls and visits and defamed him with a view to taking his client base. The applicant had obtained personal safety intervention orders against both these individuals, which orders were exhibited on the plea. His Honour said he was prepared to give some weight to this alleged harassment, although he noted that there was no specific evidence as to the nature of the harassment or its impact on the applicant.[30]
[30]Ibid [68]–[71].
Second, the applicant had been the subject of a media article which reported on his offending and raised other allegations against him. The judge said that this article did not amount to a sustained publicity campaign, but nevertheless accepted Ms Markos’s evidence that it had contributed, in part, to the applicant’s stress, anxiety and depression.[31]
[31]Ibid [72]–[73].
Third, the applicant had lost his career in IT and given up involvement in charitable works.[32]
[32]Ibid [74]–[75].
Finally, by reason of a departure prohibition order, the applicant had been unable to visit his parents and faced the prospect of never seeing them again.[33]
[33]Ibid [76].
Although the judge accepted that the applicant had been subjected to some degree of extra-curial punishment, his Honour considered that this did not approach an extreme or exceptional level.[34]
Plea of guilty and remorse
[34]Ibid [77].
The judge gave the applicant credit for pleading guilty at an early opportunity, and noted that the plea was some evidence of remorse.[35] His Honour said that the applicant’s recognition that his actions were ‘careless and negligent’ understated the criminality of his behaviour, at least with respect to charge 3.[36] Further, any expression of remorse was qualified by the fact that it was not present in the immediate aftermath of the offending.[37]
Cooperation
[35]Ibid [82]–[84].
[36]Ibid [85].
[37]Ibid [87]–[88].
There were ancillary proceedings in respect of assets worth $2.7 million held in the name of the applicant’s wife. The applicant had made an offer to settle the matter by his wife forfeiting, for his benefit, the sum total of the proceeds that were the subject of charges 1 and 2. The offer was rejected by the Commissioner for the Australian Federal Police, but the judge accepted that it demonstrated some co-operation in attempting to resolve the matter.[38]
Good character and rehabilitation prospects
[38]Ibid [79]–[80].
The judge noted that the applicant had no criminal history and had otherwise been of good character, as evidenced by the various charitable works with which he had been involved.[39]
[39]Ibid [89]–[92].
His Honour concluded that the applicant’s rehabilitation prospects were ‘at least good.’[40] The judge also considered that his extra-curial punishment would serve as a deterrent.[41]
Sentence
[40]Ibid [99].
[41]Ibid [98].
The judge rejected the applicant’s submission that the extra-curial punishment, together with the other forms of punishment, obviated the need for a term of imprisonment. His Honour found that an immediate term of imprisonment was required having regard to all the factors, including the seriousness of the offending and the need for general deterrence and denunciation.[42] His Honour said that some cumulation was justified because there was no strict overlap between the charges. Nevertheless, his Honour was mindful of the principle of totality given that the offending was related in time and subject matter.[43]
[42]Ibid [101]–[102].
[43]Ibid [100].
Proposed grounds of appeal
The applicant relies on the following three proposed grounds of appeal:
Ground 1: The learned judge erred in failing to sentence the Applicant for what he did in dealing with the money the subject of the money laundering charges.
Ground 2: The learned judge erred in failing to consider comparable cases for the money laundering offences in a bid to achieve national consistency in sentencing.
Ground 3: The individual sentences and the total effective sentence are each manifestly excessive having regard to:
(a) Current sentencing practices;
(b) The early plea of guilty;
(c) The lack of any prior convictions;
(d) The application of Verdins 5 and 6;
(e) The delay between the offending and sentence;
(f) The extra-curial punishment;
(g) The co-operation regarding confiscation proceedings; and
(h) The prospects for rehabilitation.
We turn now to consider each of these proposed grounds.
Ground 1
By proposed ground 1, the applicant alleges that the judge had regard only to the quantum of money received, and erroneously failed to consider what the applicant did in dealing with the money that was the subject of charges 1 and 2. Relying on a passage from R v Ansari,[44] the applicant submitted that the most important consideration in sentencing an offender for an offence under div 400 of the Criminal Code will be to consider what the applicant did in the commission of the offence.
[44](2007) 70 NSWLR 89, 119 [123] (Howie J, with whom Simpson and Hislop JJ agreed).
It was submitted that, assessed objectively, the applicant’s level of criminality was ‘very low’ having regard to the following factors:
(a) the applicant was not the director of Balancing High;
(b) the applicant did not apply for Balancing High to be registered for the Research and Development Tax Incentive for either financial year;
(c) Balancing High’s director and tax agent lodged the income tax returns without the applicant knowing of the false claims; and
(d) the applicant did not authorise the transfers from Balancing High to the accounts associated with him.
It was said that it would not have been apparent that the money was proceeds of crime given that it was received from a legitimate company. It was further submitted that the applicant, as a recipient, was less morally culpable than offenders who transfer, or facilitate the transfer, of money.
In response, the respondent submitted that quantum is ‘a paramount consideration’ in assessing what the accused did having regard to the offence hierarchy created by div 400 of the Criminal Code, which categorises offences by reference to the quantum of money involved. Knowledge of the accused was said to be necessarily of limited relevance in sentencing for offences under s 400.9 given that the test imported by that section is one of objective reasonableness and does not involve consideration of the accused’s subjective knowledge or belief.
It was submitted that the judge had correctly sentenced the applicant on the basis of the ‘bare elements’ of the offence given that no finding could be made as to whether the applicant knew of the illicit source of the money. In that regard, the respondent noted that the applicant had abandoned the contention, put by his counsel in opening on the plea, that he believed the funds were legitimate loan repayments. Given that the applicant had personally received the money and taken the benefit of it, his level of criminality could not properly be characterised as ‘very low’.
Analysis
As noted above, the applicant relied on R v Ansari in support of his contention that the most important consideration in sentencing an offender under div 400 will be to consider what the offender did. In that case, Howie J, with whom Simpson and Hislop JJ agreed, observed that in many money laundering cases, there may be little or no evidence before the court as to the organisation behind the offence, the source of the funds, or the ultimate use to be made of them. His Honour observed that the accused may play a relatively small role in engaging in financial transactions to launder money.[45]
[45]Ibid.
In that context, an analogy has sometimes been drawn between money laundering and drug importations in that both types of offences usually reveal a hierarchy of persons involved in the conduct who have different roles to play and different gains to be made from the commission of the crime.[46]
[46]See R v Olbrich (1999) 199 CLR 270, 279 [19] (Glesson CJ, Gaudron, Hayne and Callinan JJ); Assafiriv The Queen [2007] NSWCCA 159 [16]–[17] (Howie J, with whom Basten JA and Grove J agreed); R v Ansari (2007) 70 NSWLR 89, 119 [123] (Howie J, with whom Simpson and Hislop JJ agreed).
In order to address the submissions on this proposed ground, it is necessary to say something briefly about the structure of div 400.
Sections 400.3 to 400.8 create a number of offences when a person ‘deals’[47] with proceeds of crime.[48] Each section creates three offences, of decreasing severity, based on whether the person believed that the money (or property) was the proceeds of crime, or was reckless or negligent as to that matter. Each section relates to proceeds of crime valued at a certain amount, with proceeds of crime worth $1,000,000 or more being dealt with in s 400.3, and subsequent sections dealing with proceeds of crime of progressively smaller amounts. Thus the seriousness of the offence depends on the fault element involved and the value of the money at stake. The applicable penalties range from 25 years’ imprisonment where the person dealing with the money believes it to be proceeds of crime and the value of the money exceeds $1,000,000,[49] to a fine of 10 penalty units where the person is
negligent as to whether the money is proceeds of crime and the value of the money is less than $1,000.[50]
[47]‘Deals’ is broadly defined in s 400.2 of the Criminal Code.
[48]The proceeds may be money or property (see the definition of ‘proceeds of crime’ in s 400.1 of the Criminal Code). The offences also extend to where the money or property is an ‘instrument of crime’, as defined in s 400.1.
[49]Criminal Code s 400.3(1).
[50]Ibid s 400.8(3).
Section 400.9 is different in some important respects.[51] Relevantly to the present matter, it applies where a person ‘deals’ with money (or property), and it is reasonable to suspect that the money was proceeds of crime. Where the value of the money is equal to or greater than $100,000, s 400.9(1) applies and the maximum penalty is 3 years’ imprisonment. Where the value is less than that amount, s 400.9(1A) applies with a maximum penalty of 2 years’ imprisonment.
[51]See Shi v The Queen (2014) 246 A Crim R 273, 285–6 [44]–[46] (‘(Shi’).
The requirement in ss 400.9(1)(b) and 400.9(1A)(b) that it is reasonable to suspect that the money is proceeds of crime is an objective test. Section 400.9(2) provides that, in certain circumstances, that paragraph is taken to be satisfied. So, for example, if the dealing involves a number of transactions that are structured to avoid reporting requirements under the Financial Transactions Reports Act 1988 (Cth), then s 400.9(2) provides that s 400.9(1)(b) is taken to be satisfied. In other words, in that circumstance, it is reasonable to suspect that the money is proceeds of crime.
It is also relevant to note that absolute liability applies to sub-ss (1)(b) and (c) and sub-ss (1A)(b) and (c).[52] However, s 400.9 does not apply if the accused proves that he or she had no reasonable grounds for suspecting that the money was derived or realised, directly or indirectly, from some form of unlawful activity.[53]
[52]Criminal Code s 400.9(4).
[53]Ibid s 400.9(5).
In the course of oral argument, counsel for the applicant sought to differentiate this case (where there was a transfer of money into a bank account) from cases where a person receives money in what he contended would obviously be suspicious circumstances or cases where the dealing forms part of an elaborate or sophisticated scheme. It was said that those latter types of cases were exemplified by Assafiri v The Queen.[54]
[54][2007] NSWCCA 159. That case involved an accused who had engaged in protracted criminal offending over a period of six months. The accused used two false identities to purchase two companies and set up five bank accounts, including one in the name of a false identity. The sums transferred to overseas bank accounts were generally in the amount of $9,500 to avoid the compulsory notification limit under s 15 of the Financial Transactions Reports Act 1988 (Cth): see [12]–[13].
In examining the objective seriousness of an offence under s 400.9, there is very little room for a differentiation based on the state of mind or knowledge of the accused as to whether or not the money was the proceeds of crime. In the case of an amount of equal to or greater than $100,000, if the accused believed, or was reckless or negligent, as to whether the money was the proceeds of crime, he or she would be guilty of an offence under s 400.4. That would constitute a different and more serious offence, not an aggravating feature of an offence under s 400.9(1). Sentencing on the basis that it was an aggravating feature of a s 400.9 offence would be contrary to the principle propounded by the High Court in R v De Simoni.[55]
[55](1981) 147 CLR 383. See Shi (2014) 246 A Crim R 273, 286 [48].
That conclusion also has significance for assessing the culpability of the accused by reference to his or her conduct. Thus, in the present case, the applicant’s argument in relation to his conduct was largely directed to demonstrating a lack of knowledge on his part as to the source of the funds.
Although it will be important to assess precisely what the accused did in the commission of the offence, the structure and purpose of div 400 clearly support the proposition that the value of the proceeds of crime will be a paramount consideration in assessing the objective seriousness of the offence.[56] There was no error in the judge describing the size of the payment involved as ‘the most significant objective fact’ that informed the gravity of charge 2.[57]
[56]See R v Jiao (2015) 251 A Crim R 236, 249 [66].
[57]Reasons [32].
The judge sentenced the applicant on the ‘bare elements’ of the offence, having regard to the quantum of money involved and the fact that the applicant had personally received and taken the benefit of that money.[58] These were plainly relevant considerations in determining the applicant’s culpability, particularly in relation to charge 2, where the quantum of money involved was significantly above the threshold for the offence.
[58]Ibid [31]–[33].
It should also be emphasised that the judge did not rest his assessment of the gravity of the offending in charges 1 and 2 solely on the quantum of money. In [32] of the reasons for sentence, which was relied on by the applicant, his Honour noted that the most significant objective fact which informs the gravity of charge 2 was the size of the payment involved. However, the judge went on to say that the applicant had personally obtained the benefit of the funds in that the money was ultimately transferred into a mortgage account in his name. It is clear that the judge regarded the quantum of money and the fact that it had been received and put to the applicant’s own use as both bearing upon the gravity of the offending.
In the latter respect, the applicant’s submission underplayed the fact that he had received the total amount of money that was involved in the offence. The applicant did not simply play some facultative role in the transaction: rather, his dealing in the funds involved receipt and use of the money for his own benefit.
No error can be shown in the judge’s approach. Leave must be refused in respect of proposed ground 1.
Ground 2
By proposed ground 2, the applicant contends that the judge failed to consider comparable cases for the offences the subject of charges 1 and 2. This was said to be a specific error because current sentencing practice is a mandatory consideration for judges in sentencing for Commonwealth offences.
The applicant submitted that none of the cases referred to the judge on the plea dealt with sentences imposed for money laundering offences, and that the judge’s reasons for sentence do not disclose consideration of any such cases.
There are two insuperable difficulties standing in the way of success on this proposed ground. The first is that, in his reasons for sentence, the judge in [20] identified the legal principles in relation to the money laundering offences. In [21], his Honour identified the principles which emerge from Victorian and interstate appellate authority in relation to defrauding the Commonwealth.
The judge then said the following:
I have otherwise considered current sentencing practice. In particular, I considered the sentences referred to me at the plea by both parties which inform current sentencing practice, particularly with respect to Charge 3. Of course every case is necessarily different, but these sentences do assist in broadly identifying the general range of sentences available.[59]
[59]Reasons [22].
There is therefore no foothold for the submission that the judge failed to take into account current sentencing practice. The judge was not required to specifically identify all the cases which he had considered and his attention was not drawn by the parties to any cases specifically dealing with s 400.9. His Honour clearly proceeded on the basis that it was appropriate to have regard to current sentencing practice in arriving at an appropriate sentence and stated that he had done so. There is nothing in the reasons (or the sentences imposed on charges 1 and 2) that suggests that he failed to consider comparable cases or erred in his consideration of those cases.
The second obstacle is that this proposed ground pays insufficient regard to the statutory setting in which the sentence was passed. By s 16A of the Crimes Act 1914 (Cth), the judge was required to impose a sentence that was of a severity that was appropriate in all the circumstances of the offence. In doing so, he was required to have regard to the non-exhaustive list of matters in s 16A(2) as were relevant and known to the Court. Those matters did not include current sentencing practice.
Section 16A applied of its own force to the sentencing of the applicant as a person who had pleaded guilty to a federal offence.[60] Section 16A accommodates some common law principles, including, for example, general deterrence, proportionality and totality.[61] Consistency in sentencing is an important common law principle that sits within s 16A.[62]
[60]Bui v DPP (Cth) (2012) 244 CLR 638, 650–1 [18].
[61]Ibid.
[62]See R v Pham (2015) 256 CLR 550, 557 [23] (French CJ, Keane and Nettle JJ); Hili v The Queen (2010) 242 CLR 520, 528 [24]–[25] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).
Having regard to comparable cases from intermediate appellate courts across the Commonwealth is an important aspect of sentencing for federal offences. It is important because they may provide guidance as to the identification and application of relevant sentencing principles. And they may yield discernible sentencing patterns and possibly a range of sentences against which to examine a proposed or impugned sentence.[63]
[63]R v Pham (2015) 256 CLR 550, 558 [26] (French CJ, Keane and Nettle JJ).
A failure to have regard to current sentencing practice for Commonwealth offences cannot be established simply by a judge’s failure to mention them in the course of setting out the reasons for sentence. To require judges to set out a list of comparable cases and the extent to which the judge has found them relevant or distinguishable would impose an unnecessary and onerous burden on sentencing judges. That is all the more so where, as in this case, counsel for the applicant did not rely on any specific cases before the judge in relation to the offences against s 400.9. A failure to have regard to current sentencing practice may, however, be reflected in the identification or application of an erroneous principle or because the sentence is shown to be manifestly inadequate or manifestly excessive.
As already noted, the judge had regard to intermediate appellate authorities to identify the relevant sentencing principles. Whether the sentence fell outside the range of permissible sentences is a question that is raised in proposed ground 3. Properly analysed, the assertion that there was a failure to have regard to current sentencing practice is no more than a particular or explanation as to why the sentence was said to be manifestly excessive. It is not a ground of specific error. Proposed ground 2 must be rejected.
Ground 3
By proposed ground 3, the applicant alleges that the individual sentences and the total effective sentence are each manifestly excessive having regard to:
(a) current sentencing practice;
(b) the applicant’s early plea of guilty;
(c) the lack of prior convictions;
(d) the application of Verdins principles 5 and 6;
(e) the delay between the offending and sentence;
(f) the extra-curial punishment;
(g) the applicant’s co-operation in confiscation proceedings; and
(h) the prospects of rehabilitation.
An applicant seeking to make out the ground of manifest excess must demonstrate that the sentence imposed is ‘so far outside the range of a reasonable discretionary judgment as to itself bespeak error.’[64] In Clarkson v The Queen, this Court said:
the ground of manifest excess will only succeed if it can be shown that the sentence was ‘wholly outside the range of sentencing options available’ to the sentencing judge. That is, it must be shown that it was not reasonably open to the sentencing judge to come to the sentencing conclusion which he or she did, if proper weight had been given to all the relevant circumstances of the offending and of the offender. This is a stringent requirement, difficult to satisfy. It reflects the oft-repeated policy that sentencing is for judges and magistrates at first instance. Sentencing is not the task of the appellate courts, except where clear error is shown.[65]
[64]Hanks v The Queen [2011] VSCA 7 [22] (Bongiorno JA, with whom Redlich JA agreed).
[65](2011) 32 VR 361, 384 [89].
In support of the contention that the sentences imposed on charges 1 and 2 were manifestly excessive, the applicant relied on the matters raised in proposed grounds 1 and 2. In relation to charge 3, it was said that the judge had made no allowance for the fact that the applicant had been charged with an attempt rather than a complete offence.
Sentences imposed for charges 1 and 2
In relation to charges 1 and 2, it was submitted that imprisonment should have been a measure of last resort. It was again said that the applicant had no compelling reason to suspect the money was proceeds of crime and that his offending lacked features evident in other offending contrary to s 400.9, such as there being a scheme to launder money or transfer money out of the country.
As noted above in relation to proposed ground 1, the applicant’s culpability in respect of the money laundering offences fell to be assessed by reference to the significant quantum of money that he received, which money was received by him personally and applied for his benefit. Having regard to these factors, the sentences imposed by the judge were, in our view, by no means wholly outside the range of sentences available to the judge.
A sentence of 12 months’ imprisonment on charge 2, in relation to which the maximum term of imprisonment was 3 years, was not outside the permissible range. It was accepted in R v Jiao that money laundering is a serious offence, that the amount of money is a paramount consideration, and that general deterrence is of importance.[66] We agree with each of those matters.
[66](2015) 251 A Crim R 236, 249 [66].
Having regard to those considerations, and the factors in mitigation which were comprehensively set out in the judge’s careful and detailed reasons, we are not persuaded that the sentences on charges 1 and 2 were outside the permissible range.
Sentence imposed for charge 3
The applicant submitted that the sentence imposed for charge 3 was outside the permissible range and was reflective of a complete offence against s 134.2(1). Although the applicant acknowledged that, by reason of s 11.1, the maximum penalty for attempts and complete offences is the same, it was submitted that there is ordinarily an allowance made for attempts on the grounds that there has been no loss to the revenue and no gain to the applicant.
The applicant referred to a number of cases to make good the proposition that the authorities differentiate between attempts and complete offences. Counsel for the applicant noted that, in most of these cases, the offender had been detected attempting to defraud the Commonwealth after having completed a string of similar offences. A distinction was drawn between those cases and the offending in this case (which involved only a single attempt to defraud).
Before us, counsel for the applicant highlighted three of the cases referred to in written submissions. Those cases were:
(a) Aitchison v The Queen,[67] in which the appellant was sentenced to 18 months’ imprisonment for attempting to defraud the ATO of $600,515. Prior to being detected, the appellant had defrauded the ATO of $406,694 (for which he was sentenced to 2 years’ imprisonment), $2,391,935 (sentenced to 4 years’ imprisonment) and $3,055,180 (sentenced to 5 years’ imprisonment).
(b) DPP (Cth) v Rowson,[68] in which the respondent was resentenced to 3 years’ imprisonment for attempting to defraud the ATO of $1,333,173. Prior to being detected, the respondent had defrauded the ATO of $2,453,102 (for which he was resentenced to 4 years’ imprisonment).
(c) R v Gaitanis,[69] in which the applicant was sentenced to one year on each of two counts of attempting to defraud the Commonwealth of $179,000. Prior to being detected, the applicant had defrauded the ATO of $1,050,000 (with each of the eight charges attracting a sentence of 1, 2 or 3 years).
[67][2015] VSCA 348.
[68][2007] VSCA 176.
[69][1998] VSCA 57.
It was submitted that the sentence imposed in Gaitanis for the attempt offence reflects the range of sentences that were available to the judge in this case.
The respondent contended that the sentence imposed for charge 3 was not inordinately high. The respondent submitted that only one of the authorities referred to by the applicant, namely Aitchison, revealed a significant differential between the sentences imposed in respect of attempts and complete offences. It was said that it is not possible from this single decision to derive a proposition that an allowance must be made in respect of attempts.
The respondent acknowledged that, by operation of s 16A of the Crimes Act, the fact that no loss resulted to the Commonwealth was a relevant matter to which the judge was required to have regard. Nevertheless, it was submitted that the applicant’s conduct in persisting with his claim during the audits was an equally, if not more, relevant factor to be taken into account by the judge.
Analysis in respect of the sentence imposed for charge 3
Charge 3 involved an attempt to defraud the revenue of over $220,000. The fraud was not completed and the applicant was charged with an attempt because an audit by the ATO had detected the false research and development claim and reversed the decision to allow the refund. From the applicant’s perspective, no further conduct on his part would have been required in order to complete the fraud. He took no steps to undo the wrongdoing; indeed, he subsequently provided the ATO audit team with a number of false documents to substantiate the research and development claim.
The judge rightly noted that the offending was ‘not an opportunistic, spur of the moment misjudgement, quickly regretted.’[70]
[70]Reasons [26].
In DPP (Cth) v Gregory, this Court accepted that the size of the benefit that is received by a party defrauding the revenue may be a significant factor in sentencing.[71]
[71](2011) 34 VR 1, 13 [41].
The Court observed, however, that general deterrence is a particularly significant sentencing consideration in white collar crime, especially taxation offences which are not easy to detect and, if undetected, may produce great rewards. The Court expressed the view that ‘[i]n many if not most cases, imprisonment will be the only sentencing option for serious tax fraud in the absence of powerful mitigating circumstances.’[72] The Court said that tax fraud had not always been as severely enforced as other forms of criminal conduct with there being a ‘tendency to place a disproportionate emphasis on a dollar value concept of the loss’ resulting in a lack of deterrence and proportionality.[73]
[72]Ibid 16 [54] (citations omitted).
[73]Ibid 16 [55] (citations omitted). In the result, although the Court agreed with the Director’s contention that a head sentence of four to six years would have been appropriate (with the respondent to serve between three and four years before being eligible for release), it ultimately declined to intervene for reasons that are not here relevant.
In our view, the sentence imposed for charge 3 of two years and five months’ imprisonment was not wholly outside the range of permissible sentences. The sentencing judge was required to take into account the fact that no loss had resulted to the Commonwealth by the applicant’s conduct. However, this was to be balanced against the fact that the applicant’s offending involved an attempt to defraud a large sum of money. Further, as the Court emphasised in Gregory, the ‘dollar value concept of the loss’ is not to be given disproportionate emphasis at the expense of considerations of general deterrence and denunciation.
Conclusion on ground 3
It follows that the applicant has failed to establish that the individual sentences imposed in respect of each of the three charges, or the total effective sentence, are manifestly excessive.
Conclusion
As none of the proposed grounds of appeal justifies the grant of leave, the application for leave to appeal must be refused.
- - - - -
13
0