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10
Court of Criminal Appeal 1 December 2003

REGINA v KEARNS

[2003] NSWCCA 367

Fraud & dishonesty
CRIMINAL LAW CORPORATE FRAUD SENTENCING WHERE INTERCONNECTING SETS OF SENTENCES APPLICATION OF PRINCIPLE OF TOTALITY.

Citation: [2003] NSWCCA 367
Court: New South Wales Court of Criminal Appeal
Date: 1 December 2003
Judge(s): Spigelman CJ, Dunford J, Hidden J

Background

The appellant was a solicitor who obtained effective control of the Nambucca Group of Companies, a community-based financial intermediary in northern New South Wales that raised funds through debentures and invested them in mortgage finance and property development. The Crown alleged that between late 1994 and early 1995, the appellant used that control to dishonestly divert funds from the corporate group to his own company, and to fraudulently induce local investors to entrust their savings to Nambucca on the basis of false representations.

The appellant was convicted by a jury on nine counts, comprising offences under both the Corporations Law 1991 (Cth) and the Crimes Act 1900 (NSW). He was sentenced to an overall head sentence of six years with a non-parole period of four and a half years, formed by a combination of consecutive and concurrent terms across the two statutory regimes.

A co-accused, Mr Parkes, had been tried and convicted separately before the same District Court judge. The fact that the same judge presided over both trials became the central ground of the conviction appeal.

  • Whether the trial judge's prior presiding over the separate trial of a co-accused, involving the same corporate victim, gave rise to a reasonable apprehension of bias
  • Whether investigative delay had any bearing on the validity of the conviction or sentence
  • Whether the sentencing judge erred in applying the principle of totality when imposing sentences under two distinct regimes: Commonwealth (Corporations Law) and State (Crimes Act 1900)
  • Whether the individual sentences, and the overall sentencing outcome, fell within the permissible exercise of sentencing discretion

Decision

Apprehended bias: The Court rejected the apprehended bias ground. The fact that the same judge had presided over a co-accused's separate trial, in which the corporate victim was the same, did not give rise to a reasonable apprehension that the judge might not bring an impartial mind to the appellant's trial. The Court found no basis for concluding that exposure to the earlier proceedings would have compromised the judge's impartiality.

Delay: The argument based on investigative delay did not succeed. The Court did not find that any delay in the investigation process affected the propriety of the conviction or warranted interference with the sentence.

Sentencing across two regimes: The Court addressed the particular complexity of sentencing an offender under both a Commonwealth regime and a State regime simultaneously. Spigelman CJ acknowledged the difficulty of accommodating separately imposed sentences for each offence under different regimes while also applying the totality principle. The sentencing judge had treated the two sets of offences as entirely distinct, applied the Commonwealth regime to the Corporations Law counts and the State regime to the Crimes Act counts, and expressly considered totality when structuring the interconnection between the two sets of sentences.

Totality and outcome: The Court found that the sentencing judge's approach was correct. The victims in each phase of offending were different, and the character of the offending under each regime was distinctive. Imposing the State sentences to commence upon the expiration of the non-parole period for the Commonwealth sentences was held to be appropriate. Neither the individual sentences nor the overall outcome fell outside the range of legitimate sentencing discretion.

Orders Made

  • Appeal dismissed.

Key Takeaways

  • A trial judge's prior presiding over a co-accused's separate trial, involving the same corporate victim, does not of itself establish a reasonable apprehension of bias against a later accused.
  • Where an offender is sentenced across Commonwealth and State regimes simultaneously, the sentencing court is entitled to treat each set of offences as entirely distinct and to apply the applicable regime to each set separately.
  • The principle of totality still applies when interconnecting Commonwealth and State sentences, requiring the sentencing court to consider the overall effect of the combined sentences in light of the total criminality disclosed.
  • Structuring State sentences to commence upon the expiration of the non-parole period for Commonwealth sentences can be a legitimate exercise of sentencing discretion, depending on the distinctiveness of the offending and the different victims involved.
  • In dismissing the appeal, the Court of Criminal Appeal signalled that sentencing judges will not be closely scrutinised on the precise language used when navigating the complexities of dual-regime sentencing, provided the principle of totality is expressly engaged and the outcome is within the permissible range.

Legislation and Cases Referenced

Legislation:
- Corporations Act 2001 (Cth) s 1401
- Corporations Law 1991 (Cth) ss 232, 596, 1317BA, 1317FA
- Crimes Act 1900 (NSW) ss 178BA, 178BB
- Crimes Act 1914 (Cth) ss 16A, 16G, 19AB
- Crimes (Sentencing Procedure) Act 1999 (NSW) s 21A

Cases:
- Balic (No 2) (1994) 75 A Crim R 515
- Johnson v Johnson (2000) 201 CLR 488