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Court of Criminal Appeal 13 July 2007

Bikhit v Regina

[2007] NSWCCA 202

Fraud & dishonesty
CRIMINAL LAW SENTENCING ACCESSORY AFTER THE FACT OF FRAUD PLEAS OF GUILTY PARITY OBJECTIVE CRIMINALITY

Citation: Bikhit v Regina [2007] NSWCCA 202
Court: NSW Court of Criminal Appeal
Date: 13 July 2007
Judge(s): Beazley JA, Grove J, Simpson J

Background

The applicant was a director of a chemical supply company that was a customer of a business operated by two brothers. Those brothers ran a debt-factoring arrangement with a financial services company, under which they sold trade debts for an advance payment. The brothers submitted false invoices to the factoring company, representing debts that had never arisen, and received advances against those fictitious amounts.

The applicant's company was the named trade debtor on two of those false invoices. The factoring company sought payment from the applicant's company, and payment was ultimately made, with funds in one case supplied by the brothers and in the other reimbursed by them afterwards. The applicant pleaded guilty in the District Court to two counts of being an accessory after the fact to the brothers' frauds, offences carrying a maximum of five years' imprisonment.

Mahoney ADCJ sentenced the applicant to 18 months' imprisonment (12-month non-parole period) on each count, to be served concurrently. The applicant sought leave to appeal against the severity of those sentences in the Court of Criminal Appeal.

  • Whether the evidence placed before the District Court was sufficient to establish the applicant's criminality as an accessory after the fact to the specific fraud charges brought
  • Whether the sentencing judge had properly identified the nature and extent of the applicant's conduct, and whether it was open to attribute to the applicant any responsibility for the $1.3 million loss said to have been suffered by the factoring company
  • Whether, in circumstances where neither the Crown nor the applicant's counsel could articulate the precise basis of the applicant's criminal liability, the sentence imposed could be sustained
  • Whether a section 10A order under the Crimes (Sentencing Procedure) Act 1999 (disposing of proceedings without imposing any further penalty) was the appropriate outcome on resentencing

Decision

Simpson J, with whom Beazley JA and Grove J agreed, found that the evidence placed before the District Court was simply deficient. On the agreed facts, the transactions involving the applicant's company had resulted in the factoring company receiving full payment of the invoiced amounts, with the brothers bearing the cost of that payment. No loss to the factoring company could be traced to the two transactions that formed the subject of the charges.

The sentencing judge had treated the applicant's involvement as participation in the brothers' broader scheme, attributing to him some responsibility for the overall $1.3 million loss. Simpson J held this was not open on the charges as brought. The applicant had been charged as an accessory to specific discrete offences, not as a participant in a broader conspiracy or enterprise, and the evidence did not establish the principal offences in relation to those two transactions.

Grove J noted that neither counsel in the appeal could explain how any action of the applicant had contributed to any identifiable loss, and that the Crown was unable to formulate precisely what criminality the applicant was being punished for. In those extraordinary circumstances, Grove J concluded that the nearly three months already served in custody was sufficient punishment for whatever misconduct the applicant had acknowledged by his plea.

All three judges agreed that the appropriate disposition, on resentencing under section 6(3) of the Criminal Appeal Act 1912, was an order under section 10A of the Crimes (Sentencing Procedure) Act 1999, recording the conviction but imposing no further penalty.

Orders Made

  • Leave to appeal granted
  • Appeal allowed
  • Sentence quashed
  • Applicant resentenced pursuant to section 6(3) of the Criminal Appeal Act 1912, with an order under section 10A of the Crimes (Sentencing Procedure) Act 1999 that proceedings be disposed of on the basis that no other penalty be imposed
  • Applicant released forthwith

Key Takeaways

  • A sentencing court cannot attribute to an accessory after the fact responsibility for losses arising from the principal offenders' broader scheme when the charges are limited to two discrete transactions and the evidence does not establish that those transactions caused any identifiable loss.
  • Where the Crown is unable to identify, with any precision, the criminality for which an offender is to be punished, that evidentiary deficiency fundamentally undermines the sentencing exercise.
  • Section 10A of the Crimes (Sentencing Procedure) Act 1999 is available as a resentencing disposition where the Court of Criminal Appeal quashes a sentence and finds that time already served in custody represents adequate recognition of any wrongdoing.
  • Pleas of guilty, even where maintained on legal advice, do not oblige a sentencing judge to proceed on an inadequate factual basis; Simpson J observed it would have been open to the judge to reject the pleas where the evidence was insufficient to support them.
  • Participation in conduct that assists others in a deceitful enterprise may disclose wrongdoing without necessarily establishing liability for the specific offence charged. Had the applicant been charged with a differently framed accessorial offence, the Court noted, his pleas may well have been appropriate.

Legislation and Cases Referenced

Legislation
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 10A
- Criminal Appeal Act 1912 (NSW), s 6(3)
- Crimes Act 1900 (NSW), ss 176A, 178BA, 350

Cases
- R v Negline (NSWCCA, 5 December 1990)
- R v Thomson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383