Citation: Gomes v Regina [2008] NSWCCA 142
Court: NSW Court of Criminal Appeal
Date: 24 June 2008
Judge(s): Tobias AJA, Hulme J, Hidden J
Background
Two brothers, both directors of a company called Smartpak Australia Pty Ltd, pleaded guilty to 12 counts of fraud under s 176A of the Crimes Act 1900, each carrying a maximum penalty of 10 years' imprisonment. The fraud involved submitting false invoices to Scottish Pacific Business Finance Pty Ltd under a legitimate factoring arrangement, through which Smartpak converted fictitious invoice debts into immediate cash advances.
The scheme operated from November 2002 to October 2003 and, according to an agreed statement of facts, involved over 400 false invoices in total. The two applicants asked the court to take into account a further 62 similar offences on a Form 1 (a statutory mechanism that allows additional offences to be acknowledged at sentencing without separate conviction). The 74 offences together involved invoice amounts totalling approximately $2.04 million, though Scottish Pacific ultimately received repayment of those amounts through coordinated transfers, often funded by Smartpak itself.
In the District Court, Mahoney ADJ imposed a structured cascade of sentences across the 12 counts, grouped by the dollar value of the relevant invoices. The effective sentence was a non-parole period of just under three years and a total term of approximately four years and ten months. The applicants sought leave to appeal to the Court of Criminal Appeal, arguing the sentences were manifestly excessive and that various errors had infected the sentencing exercise.
Legal Issues
- Whether the individual sentences were manifestly excessive in light of the relevant facts and circumstances
- Whether the sentencing judge erred in assessing objective criminality by rejecting the submission that Scottish Pacific suffered no loss
- Whether the judge erred in characterising the total invoice amounts as representing loss to Scottish Pacific
- Whether the judge improperly relied on agreed facts tendered in the proceedings of co-offenders (Bikhit and Baldini), which referred to a $1.3 million loss suffered by Scottish Pacific
- Whether the judge erred in treating the evidence of a police forensic accountant as qualified or limited in its application
- Whether the judge erred in treating as irrelevant the fact that the applicants' prosecutions arose from disclosures made under compulsory examination under s 177 of the Crimes Act 1900
Decision
The Court granted leave to appeal but dismissed the appeal on all grounds. On the question of loss, the agreed statement of facts in the applicants' own proceedings did not state that Scottish Pacific suffered a loss. The statement of facts in the co-offenders' proceedings did refer to a $1.3 million loss, but the Court examined whether the sentencing judge impermissibly relied on that material when sentencing the applicants. While the judge's remarks were not ideally expressed, the Court found no error warranting intervention.
On the compulsory examination ground, the Court considered the applicants' argument that their cooperation in a s 177 examination should have operated as a mitigating factor. The Court addressed this in the context of the applicable sentencing principles, ultimately finding no error in the approach taken by Mahoney ADJ.
Regarding the individual sentences, Hulme J acknowledged that the sentences imposed on the earlier offences, particularly count 1 (which involved a first offence by defendants with clean records), appeared high when viewed in isolation. However, each of those charges had multiple additional offences of substantial dollar value taken into account on the Form 1. In those circumstances, the Court was not persuaded that the individual sentences were excessive.
On the overall sentence, the Court was firm. Hulme J observed that a sentence of approximately five years, with a non-parole period of approximately three years, for 74 offences involving $2 million in fraudulent invoices, could be regarded as extremely lenient even accounting for repayment. Hidden J agreed that no lesser sentence was warranted, though he declined to characterise the total sentence as "extremely lenient."
Orders Made
- Leave to appeal granted
- Appeal dismissed
Key Takeaways
- In dismissing the appeal, the Court of Criminal Appeal confirmed that repayment of fraudulently obtained funds does not eliminate the objective seriousness of large-scale invoice fraud, particularly where the repayment was a necessary mechanical feature of the scheme rather than a genuine remediation.
- Where a sentencing judge's remarks on sentence are delivered across multiple co-offenders simultaneously, appellate courts will examine whether material tendered in one offender's proceedings was improperly applied in another's, though the threshold for establishing error remains with the applicant.
- A prior good record carries reduced weight as an individual mitigating factor when the count in question involves multiple serious associated offences taken into account under a Form 1.
- Under s 176A of the Crimes Act 1900, the maximum penalty of 10 years' imprisonment signals the severity with which the legislature treats fraud by company directors; the Court treated a pre-discount sentence equating to six years as a relatively high but not necessarily erroneous proportion of that maximum given the volume and value of offending.
- No error was established in the sentencing judge declining to give material weight to disclosures made by the applicants during a compulsory examination under s 177 of the Crimes Act 1900.
Legislation and Cases Referenced
Legislation:
- Crimes Act 1900 (NSW), s 176A (fraud by company directors), s 177 (compulsory examination)
- Crimes (Sentencing Procedure) Act 1999 (NSW)
Cases:
- Pearce v R (1998) 194 CLR 610
- Unnamed CCA decision reported at (2002) 56 NSWLR 146 (referenced in relation to the purposes of sentencing)