Wahby v The Queen
[2004] WASCA 308
•22 DECEMBER 2004
WAHBY -v- THE QUEEN [2004] WASCA 308
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASCA 308 | |
| COURT OF CRIMINAL APPEAL | 22/12/2004 | ||
| Case No: | CCA:108/2004 | 5 NOVEMBER 2004 | |
| Coram: | MALCOLM CJ TEMPLEMAN J SIMMONDS J | 5/11/04 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Leave to appeal granted Appeal allowed Sentences varied by reducing minimum terms of imprisonment by 4 months in each case | ||
| B | |||
| PDF Version |
| Parties: | TAREK IBRAHIM WAHBY THE QUEEN LAWRENCE JOHN AISTROPE |
Catchwords: | Criminal law and procedure Sentencing Parity principle Appeal against less severe sentences imposed on two offenders before more severe sentences were imposed on their cooffenders Whether differences in head sentences between two sets of offenders within parity principle as engendering a justifiable sense of grievance after differences in criminality and other circumstances are taken into account Minimum term of imprisonment imposed on one set of offenders who pleaded guilty and made offers of cooperation the same as that imposed on the second set of offenders who pleaded not guilty Whether equivalence in minimum terms engenders a justifiable sense of grievance after differences in criminality, as to pleas of guilty, and other factors are taken into account |
Legislation: | Crimes Act 1914 (Cth), s 29D, s 86(1) Criminal Code 1995 (Cth) Justices Act 1902 (WA), s 100 |
Case References: | Caratti v The Queen (2000) 22 WAR 527 Goddard v The Queen (1999) 21 WAR 541 Lowe v The Queen (1984) 154 CLR 606 Mustafa v The Queen (2002) 192 ALR 254 Puls v The Queen [2000] WASCA 11 Siganto v The Queen (1998) 194 CLR 656 Beard v The Queen [2003] WASCA 262 Director of Public Prosecutions v Goldberg (2001) 184 ALR 387 R v Place (2002) 128 A Crim R 325 R v Stroud (1977) 65 Cr App Rep 150 Tisalandis v The Queen [1982] 2 NSWLR 430 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : COURT OF CRIMINAL APPEAL CITATION : WAHBY -v- THE QUEEN [2004] WASCA 308 CORAM : MALCOLM CJ
- TEMPLEMAN J
SIMMONDS J
- Appellant
AND
THE QUEEN
Respondent
- Appellant
AND
THE QUEEN
Respondent
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ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : MCKECHNIE J
Citation : THE QUEEN v WAHBY and AISTROPE
File No : INS 80 of 2003
Catchwords:
Criminal law and procedure - Sentencing - Parity principle - Appeal against less severe sentences imposed on two offenders before more severe sentences were imposed on their cooffenders - Whether differences in head sentences between two sets of offenders within parity principle as engendering a justifiable sense of grievance after differences in criminality and other circumstances are taken into account - Minimum term of imprisonment imposed on one set of offenders who pleaded guilty and made offers of cooperation the same as that imposed on the second set of offenders who pleaded not guilty - Whether equivalence in minimum terms engenders a justifiable sense of grievance after differences in criminality, as to pleas of guilty, and other factors are taken into account
Legislation:
Crimes Act 1914 (Cth), s 29D, s 86(1)
Criminal Code 1995 (Cth)
Justices Act 1902 (WA), s 100
Result:
Leave to appeal granted
Appeal allowed
Sentences varied by reducing minimum terms of imprisonment by 4 months in each case
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Category: B
Representation:
CCA 108 of 2004
Counsel:
Appellant : Mr M R Hall
Respondent : Mr A L Troy
Solicitors:
Appellant : Malcolm Hall
Respondent : Commonwealth Director of Public Prosecutions
CCA 109 of 2004
Counsel:
Appellant : Mr M R Hall
Respondent : Mr A L Troy
Solicitors:
Appellant : Malcolm Hall
Respondent : Commonwealth Director of Public Prosecutions
Case(s) referred to in judgment(s):
Caratti v The Queen (2000) 22 WAR 527
Goddard v The Queen (1999) 21 WAR 541
Lowe v The Queen (1984) 154 CLR 606
Mustafa v The Queen (2002) 192 ALR 254
Puls v The Queen [2000] WASCA 11
Siganto v The Queen (1998) 194 CLR 656
Case(s) also cited:
Beard v The Queen [2003] WASCA 262
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Director of Public Prosecutions v Goldberg (2001) 184 ALR 387
R v Place (2002) 128 A Crim R 325
R v Stroud (1977) 65 Cr App Rep 150
Tisalandis v The Queen [1982] 2 NSWLR 430
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1 JUDGMENT OF THE COURT: This case involves applications for leave to appeal against the sentences imposed on two of five persons charged in respect of a tax evasion scheme. The scheme came about following the approach made to an accounting firm by the applicants, Mr Lawrence Aistrope and Mr Tarek Wahby, in February 1998. The business idea was one involving Internet service provider facilities. Aistrope and Wahby met with a partner in the firm of accountants, Mr Walter Tieleman, and a senior manager of the firm, Mr Shaun Pearce. From about this time, it was apparent to the four that the initial plans to raise capital for the business were not likely to produce the funding required, and it would be necessary to devise and market a scheme that would, in effect, generate the funding from tax refunds for those to whom the scheme would be marketed. The scheme to produce these results was a complex one requiring the expertise of the two accounting professionals, and the involvement of a third party "lender at arm's length" from whom the bulk of the investment of those to whom the scheme was marketed would be borrowed. The "lender" that was procured was a company associated with a Mr Stephen Wharton, the fifth person charged in connection with the scheme.
2 The scheme in its final form involved the sale of franchises to investors for a total of $39,500, of which $29,500 was to be lent to investors by the company associated with Wharton. In the marketing of the scheme, it was represented as one which would result in a tax rebate to investors of up to $18,810 in the year of investment, of which the franchisee would pay $10,000 to the franchisor which, added to the proceeds of the loan, would pay for the franchise.
3 A part of the scheme as marketed was an arrangement for an investor on payment of an initial amount of $675 and an annual payment of $150 to limit his or her liability to repay the $29,500 loan. Further, the investor was to provide authorisation to the company associated with Wharton to pay the loan moneys to the franchisor. The intended effect of the first set of arrangements was to make the loan a non-recourse arrangement, which would appear to the taxation authorities to be recourse arrangements, an appearance which was crucial to the tax rebate sought; while the effect of the payment authorisations was intended to be to create an appearance of payments where none were to be made.
4 A total of 1160 franchises were sold. Had the scheme worked as the five participants had intended, taxation rebates totalling approximately $20,000,000 would have been made which would have produced a total benefit to those promoting the scheme of about $14,000,000 and a net
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- benefit to Wahby and Aistrope of approximately $6,000,000 (AB 24 - 25, pars 28, 30 and 31). In the event, the franchisor was selected for a taxation audit, and after refunds in an initial amount of $1,589,540 had been paid, further refunds were stopped. There was an investigation by the National Crime Authority into the activities of Aistrope, Wahby and their three co-accused. Before any criminal proceedings had been instituted, Aistrope left Australia for Turkey, apparently in search of business, and Wahby left Australia for Egypt, apparently to be with his ailing parents.
5 Subsequently, Wahby, Aistrope, and their three co-accused, were each charged on one count of conspiring to defraud the Commonwealth contrary to s 29D and s 86(1) of the Crimes Act 1914 (Cth). As a result of certain amendments by the Criminal Code1995 (Cth), there was some argument directed in the proceedings on these charges as to the maximum penalty provided for the offence. In the event, the learned trial Judge in all of those proceedings, McKechnie J, considered that the maximum penalty should be treated as 10 years, rather than the 20 years the Commonwealth contended for.
6 Aistrope was arrested in Turkey in July 2003 and after spending some time in custody there he was extradited to Australia, arriving in Perth on 9 December 2003 to stand trial with his co-accused (other than Wahby). This trial was listed for 12 weeks, beginning in April 2004. On 27 February 2004, Aistrope pleaded guilty, and on the same day he was sentenced to a period of imprisonment of 4 years, which was reduced by 1 year to a sentence of 3 years, for reasons to which we will return. McKechnie J set a minimum term of 18 months with a recognisance release order subject to security in the sum of $10,000 without surety and with the offender to be of good behaviour for a period of 3 years. A credit of 8 months was applied against Aistrope's minimum term, as we will explain below.
7 Upon learning of Aistrope's arrest in Turkey, Wahby contacted Aistrope's lawyer in Perth. After Aistrope had been sentenced, Wahby contacted the Commonwealth Director of Public Prosecutions and voluntarily returned to Perth from Egypt. On 6 May 2004, Wahby pleaded guilty and was sentenced by McKechnie J on that day on the same basis as in the case of Aistrope, except for a lesser credit of 4 months against the minimum term, to which we will return below.
8 The remaining three co-accused pleaded not guilty. They were subsequently convicted on 1 July 2004 following an eight-week trial
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- before McKechnie J and a jury. Aistrope and Wahby had apparently co-operated in relation to the prosecution of their co-accused. On 13 July 2004, each of the three co-accused was sentenced by McKechnie J to imprisonment for 5 years (1 year longer than Aistrope and Wahby), with a minimum term of 18 months (the same as for Aistrope and Wahby), and with a recognisance release order (with the same terms as for Aistrope and Wahby, except that no period for good behaviour was stipulated).
9 In these circumstances, Aistrope's and Wahby's applications for leave to appeal their sentences went to the matter of parity between them and those of the other offenders in light of differences between the offenders to which our attention was drawn. There was no application for leave to appeal against any other aspect of the sentences, nor did the Commonwealth indicate any intention to appeal against the sentences for the other three offenders.
10 There was also an application for an extension of time for the applications for leave to appeal. We did not understand this application to be opposed. In any event, it would be appropriate to grant it, given the way the parity issues arose out of the subsequent sentences. Aistrope was, as we have said, sentenced on 27 February 2004, and Wahby on 6 May 2004, while the other three offenders were sentenced on 13 July 2004. Wahby's and Aistrope's applications for leave to appeal were lodged on 14 July 2004.
11 Following the conclusion of the argument at the hearing, the Court made orders granting leave to appeal, allowing the appeal and varying the sentences for Aistrope and Wahby. We ordered that the minimum terms of their imprisonment be varied by reducing them by 4 months in each case. The effect for Aistrope would be to reduce his minimum term to 6 months, and for Wahby to reduce his minimum term to 10 months. These are our reasons.
The parity principle
12 This principle was recently reviewed by this Court in two judgments, those of Goddard v The Queen (1999) 21 WAR 541 and Puls v The Queen [2000] WASCA 11. In Goddard, the members of the Court agreed that the principle was as expressed in Lowe v The Queen (1984) 154 CLR 606, in terms which may usefully be taken from the judgment of Mason J at 613:
"And the justification which the courts assign for intervention in the case of disparity is that disparity engenders a justifiable
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- sense of grievance in the applicant and an appearance of injustice to that impassive representative of the community, the objective bystander."
13 However, this Court in Goddard differed as to whether such a disparity would justify reducing the sentence below the bottom of the range of those which could be seen as not excessively lenient. The view of the majority was that such a disparity did not justify such a reduction. However, such a disparity would justify a reduction, within the range, even if the other, or comparator, sentences were "adjudged to be outside the range of appropriate sentencing discretion": Goddard, per Murray J at 562. The first of these two points was reinforced in Puls (supra), see especially per Murray J at [10].
14 The role of this Court is then to have regard to the position of the sentencing Judge faced with the application of the principle, a position which is described in Goddard by Murray J at 561 ([59]):
"In considering the application of the principle, all the circumstances of the case are to be taken into account; those concerned with the commission of the offence and those which are personal to the offender before the court and the co-offender. Where there are differences, as almost inevitably there will be, true parity will be produced by different sentences, each proportionate to the criminal culpability of each offender, bearing in mind, as is often said but is worth repeating, that sentencing is not and should not be a process involving a search for mathematical precision, but is an act of discretion informed by the proper application of sentencing principles to the particular case. Inevitably there will be a range of appropriately proportionate sentences which may be passed for the offence before the court."
15 In this case, of course, there is no question of a review of the trial Judge's application of the parity principle, as there is no appeal by the Commonwealth against the sentences for the three offenders who were tried subsequently. Rather, this Court is faced with the direct application of the principle to the previous sentences, where the following paragraph from the judgment of Murray J in Goddardis apposite ((supra) at 561 - 562) ([60]) :
"For the appellate court the principle is of equal importance. Such a court, appreciating that it is dealing with an exercise of
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- judicial discretion by the sentencing judge, will test whether that process has miscarried inter alia by reference to the parity principle, but again, whether that leads to a sentence being quashed and substituted by one passed by the appellate court involves an act of discretionary judgment."
16 We interpret that view as, in a case such as this, requiring us to consider whether a "justifiable sense of grievance" would be engendered. We believe that it is not of any significance that the case is an unusual one for the application of the principle, because it involves appeals by offenders subjected earlier to less severe sentences, instead of the more frequent case of appeals by those subjected later to more severe sentences.
The application of the principles
17 We begin with the head sentences for the two groups of offenders. The learned trial Judge indicated that his starting-points for the head sentences for Aistrope and Wahby, before adjustment, were 4 years in each case. This might be compared with those of the remaining offenders, which were 5 years, as we have indicated. For Aistrope and Wahby, the starting-points were reduced by 1 year, while there was no reduction for the other three offenders. The reductions were to take account of the offers of co-operation from Aistrope and Wahby (AB 32, Aistrope; AB 36, Wahby). It was put to us that this reduction was also meant to allow for the pleas of guilty each made. However, wherever the pleas of guilty entered into the trial Judge's calculations, it is our view he did indeed take them into account, more clearly in the case of Aistrope (see AB 32) than in the case of Wahby (see AB 35). It is the final sentences imposed, namely the head sentences of 3 years in each case, that are the bases for the application by this Court of the parity principle.
18 In relation to the head sentences, counsel for Aistrope and Wahby made much of the differences in the criminality between his clients and the other three offenders. The learned trial Judge differentiated between the two sets of offenders, finding the criminality of Aistrope and Wahby was "in one sense" to be seen as "less than each of you" (addressing the remaining three offenders: AB 40). The learned trial Judge also differentiated within the three offenders in the second set, between the two professionals in the accounting firm (Tieleman and Pearce), and the third offender (Wharton), who was characterised by the learned trial Judge as the person who supplied "the facade of legitimacy to the financial arrangements" (AB 40).
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19 In the end, he appears, however, to have concluded that he was "unable to distinguish between any of [the second set's three offenders] any objective features of the offence. This conspiracy depended upon each of you playing the role which you did play" (AB 42). After considering, at the level of the head sentence (AB 42), that "uppermost" was the "requirement for general deterrence and punishment, the nature of the scheme", but that account should also be taken of the "personal factors" for the three to which we return below, the learned trial Judge imposed the same head sentences on all three.
20 In accordance with the parity principle as we have described it, the differences in criminality must be considered with the other circumstances in relation to the head sentences upon which the learned trial Judge finally decided. Approaching the matter in this way, the "impassive observer" would not, in our view, have a "justifiable sense of grievance" in respect of the head sentence differential of 2 years.
The minimum terms
21 Here, as we have indicated, there was no difference between the five accused in respect of the minimum stipulated times or the recognisance conditions, except for the specification of the duration of the recognisance in the case of Aistrope and Wahby, and the non-specification in the case of the other offenders. At the hearing it was indicated on the best information available to counsel for Aistrope and Wahby a period of good behaviour for the other three offenders had, in fact, been set at 18 months, half that for the first two. However, nothing in the end appears to have been made of that.
22 Rather, counsel for Aistrope and Wahby submitted that the parity principle was engaged by the equivalence of the minimum terms. It should be noted that this equivalence was before further allowances were applied to their sentences. Those allowances arose out of their absence overseas immediately before their return to Australia to stand trial. In the case of Aistrope, who returned from Turkey, he was allowed a total credit of 8 months towards his minimum term, made up from the period he was in custody in Western Australia awaiting trial, as well as the period of time he spent in custody in Turkey awaiting extradition to this State. In the case of Wahby, who returned from Egypt, the learned trial Judge allowed him a credit of 4 months towards his minimum term, in recognition of his voluntary return from a country for which, unlike Turkey, there was no treaty of extradition with this country.
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23 Counsel for the Commonwealth sought to meet the application of the parity principle by reference to the character evidence for the remaining three offenders. This was especially the case for the two who were accounting professionals (Tieleman and Pearce). The learned trial Judge also referred to the impact of the convictions upon the families of all three offenders, as well as on their economic circumstances, present and future (AB 42). We note, however, that in respect of the third offender (Wharton), whom the learned trial Judge characterised as "a financial rogue", his Honour saw his "additional level of criminality beyond those of your co-conspirators" as going to lessen "to a degree the view of your character as expressed through the character witnesses" (AB 41).
24 As we have indicated above, the learned trial Judge did not see these disparities between the three offenders as justifying different head sentences. His Honour did indicate, however, that he would have imposed a higher minimum term for the third offender, but for his decision, as an "act of mercy and compassion", to impose the same minimum term having regard to a factor to which he had earlier referred (in different language) as one of the "personal factors" for this offender for the purposes of the determination of his head sentence (AB 41 and 42). In the context of the minimum sentence for the third offender, his Honour referred to that factor as "the very real and very sad prospect that your wife may die while you are in prison" (AB 42).
25 The comparison between the respective positions of the two sets of offenders illustrates the considerable difficulty in applying the parity principle. There were, as noted by the learned trial Judge, the pleas of guilty, the offers of co-operation and the criminality aspects by which to differentiate Aistrope and Wahby from all three of the other offenders. His Honour took into account that none of the five offenders had previous convictions, they had "lost everything they had", and had paid "a terrible price" (AB 40). While he did not note any differences in the evidence as to character for the five offenders of the sort on which counsel for the Commonwealth relied, we do not consider that any such differences assist counsel's position.
26 As counsel for the Commonwealth properly conceded, there was no evidence Aistrope and Wahby were of bad character. Both promised to co-operate in the prosecutions of the other accused, promises we were informed they fulfilled. For Wahby there was, in addition, his voluntary return from Egypt. In our view, a sharp contrast emerges from these considerations, particularly between Aistrope and Wahby, on the one hand, and the third offender (Wharton) in the second set of three. It is
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- certainly the case that the compassionate grounds in the case of Wharton must also be taken into account, as must the evidence of the destruction of the professionalcareers of the other two (Tieleman and Pearce) in the second set. Both circumstances have no parallel apparent to us in the case of Aistrope and Wahby. However, there remains a discrepancy which, in our view, is one that, added to the differences as to the pleas of guilty, and the matters of criminality, would cause the parity in the minimum terms of all five to engender a justifiable sense of grievance within the meaning of the parity principle.
27 It also seems to us that recognition of that sense of grievance would not entail, as counsel for Wahby and Aistrope would have us do, simply applying the same 1-year discount from the head sentence to the minimum terms. Such a reduction in the minimum terms as he contended for, to 6 months each (before allowing the other reductions made by the learned trial Judge), would seem to us to result in excessive leniency. We refer for this purpose to the most apposite authority cited to us by counsel for the Commonwealth, Caratti v The Queen (2000) 22 WAR 527, to which we return below. Further, such a reduction would not allow for the offsetting characteristics within the second set of offenders to which the penultimate sentence of the previous paragraph referred. While "mathematical precision" in this area is, of course, not attainable, it does not appear to us to be appropriate to proceed otherwise than by allowing a significant reduction in the minimum sentence for Aistrope and Wahby, of the 4 months previously indicated in each case.
28 Counsel for the Commonwealth, however, directed our attention to two additional considerations. One had to do with the application of the parity principle where there was (as here) a significant difference (2 years) at least in the head sentences: see Mustafa v The Queen (2002) 192 ALR 254, referring to Siganto v The Queen (1998) 194 CLR 656 at 670 per Gaudron J, where her Honour said:
"It is apparent that all components of a sentence must be taken into account to determine whether the [parity] principle has been violated, including the maximum and minimum periods of actual incarceration."
29 We have had regard to those views. It appears to us, however, that, in the circumstances of this case, the parity principle is not exhausted by reference to the head sentence differential, and as we read her Honour she allowed for just this possibility, in requiring "all components" to be taken into account.
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30 Counsel for the Commonwealth also referred us to the question whether any reduction in the minimum sentence for Aistrope and Wahby would place the resultant sentence outside the appropriate range for sentencing discretion. We were referred to the substantial sum of money of which the Commonwealth would have been defrauded had the scheme been successful (approximately $20,000,000, as we have said), a scheme from which the two appellants would have benefited to a sum between them of approximately $6,000,000 (as we have also indicated earlier). We were referred in particular to the authority of Caratti (supra). In that case, it was held on appeal that for the offence of conspiracy to defraud the Commonwealth over a significantly longer period than the period involved in this case but involving a significantly smaller sum of money ($570,000), and where the offender had been pressured to enter into the relevant conspiracy and played a lesser role than that of the principal conspirator, the offender should receive a head sentence and minimum term which were the same as Wahby and Aistrope received.
31 In our opinion, in this case a minimum term of 14 months (before allowing for the other adjustments the learned trial Judge made) would not fall outside the appropriate range of sentencing discretion. That is to say, it does not appear to us that Caratti, while indicative of the range, sets the bottom of it. In this case, we note that the appellants had originally proposed what became the scheme as a bona fide business venture, only moving to its fraudulent refinement when the inaccessibility of funding had emerged. At the same time, the scheme as it was refined became one of considerable complexity, in circumstances requiring professional advice, where the professional advisers themselves were distinguishable from a further "financial rogue".
32 This, of course, does not diminish the seriousness of the offences, a matter which the learned trial Judge, in our opinion, properly stressed in his sentencing remarks in all five cases. Very substantial sums of money were involved. There is no doubt that all accused, including Aistrope and Wahby, were aware that matters of tax evasion as distinct from tax avoidance were involved. In our opinion, that aspect of the matter is properly reflected by the imposition of imprisonment, and the length of the head sentences imposed. In this context, the minimum terms after their reduction for Aistrope and Wahby in the way we have ordered constitute an appropriate exercise of sentencing discretion.
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