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22
Court of Criminal Appeal 15 December 2009

Andrew Joseph THORN V R

[2009] NSWCCA 294

Also reported as (2009) 198 A Crim R 135
Fraud & dishonesty
CRIMINAL LAW APPEAL AGAINST SENTENCES GST FRAUDS WHETHER MAXIMUM PENALTY RELIABLE APPLICANT RE SENTENCED.

Citation: Andrew Joseph Thorn v R [2009] NSWCCA 294
Court: New South Wales Court of Criminal Appeal
Date: 15 December 2009
Judges: Campbell JA; Howie J; Rothman J

Background

The applicant was a young man who, from around April 2002, participated in a GST fraud scheme involving four trading entities registered with the Australian Tax Office. Over approximately two years, those entities lodged 26 false Business Activity Statements claiming GST refunds totalling around $295,000. The refunds were split between the applicant and a business partner and largely spent on gambling.

The applicant confessed to ATO officers in December 2003, admitting the claims were false and that he had a gambling addiction. Despite that early admission, he was not formally charged until after a further interview in August 2007 and was not sentenced until March 2009, nearly six years after his original confession.

At sentencing in the District Court, the applicant faced 11 counts of dishonestly obtaining a financial advantage under s 134.2(1) of the Criminal Code (Cth), one attempt charge, and one count of dealing with proceeds of crime (money laundering) under s 400.4(1) of the Code. The money laundering charge was used to capture the proceeds of fraudulent claims not otherwise covered by the individual fraud counts. The District Court imposed a total sentence of 5 years 4 months with a non-parole period of 3 years.

  • Whether the money laundering charge was appropriate as a vehicle to sentence for the proceeds of GST fraud already partly covered by the fraud counts, and whether the maximum penalty for that offence was a reliable sentencing guide in this context
  • Whether the sentencing judge had improperly used s 4K of the Crimes Act (Cth) to impose a single aggregate sentence across all 11 fraud offences, rather than sentencing on each individually
  • Whether the unexplained and lengthy delay between the applicant's confession and his eventual sentencing warranted a reduction in the sentences imposed
  • Whether the overall sentence imposed by the District Court was manifestly excessive in light of the applicant's subjective circumstances, including his age at the time of offending, his rehabilitation, and the delay

Decision

On the money laundering charge and maximum penalty

The Court found that using the money laundering offence to capture the balance of fraudulent GST refunds created difficulties, particularly because some of the funds in the laundering charge overlapped with funds already addressed in the fraud counts. Without tracing the specific source of the money involved in the laundering charge, the degree of overlap could not be accurately determined. The Court also found that the 20-year maximum penalty for the money laundering offence was not a reliable sentencing guide in this context, because the charge was effectively being used as a vehicle to sentence for the proceeds of tax fraud rather than for the kind of serious organised money laundering that provision was designed to address.

On the use of s 4K to impose a single sentence

Section 4K of the Crimes Act (Cth) allows a court to treat a series of offences as a single offence where they form part of a course of conduct. The Court held that the sentencing judge had used this provision inappropriately by imposing one undifferentiated sentence across all 11 fraud offences. Each offence retained its individual character and required an individual sentence, even if those sentences were structured to run cumulatively. The failure to sentence on each count separately was a legal error that infected the sentencing exercise.

On delay and subjective circumstances

The Court accepted that the delay between the applicant's December 2003 confession and his March 2009 sentencing was substantial, unexplained, and entirely attributable to the prosecution. Over that period, the applicant had genuinely reformed: he had matured, secured steady employment, and was on the threshold of marriage. The Court held that in these unusual circumstances general deterrence carried less weight, and the applicant's personal progress since the offending was a significant mitigating factor.

On re-sentencing

The Court granted leave to appeal, quashed the District Court sentences, and re-sentenced the applicant. Applying a 25 per cent discount for the guilty plea and structuring separate sentences for each offence in a staircase pattern of increasing severity, the Court arrived at an overall head sentence of approximately 4 years 2 months with a non-parole period of 2 years 4 months, a meaningful reduction from the original sentence.

Orders Made

  • Leave to appeal granted; appeal allowed
  • Sentences imposed in the District Court quashed
  • On the attempt charge: 6 months imprisonment from 27 March 2009
  • On the first obtaining charge: 6 months imprisonment from 27 July 2009
  • On the 2nd to 5th obtaining charges: 9 months imprisonment from 27 January 2010
  • On the 6th to 8th obtaining charges: 14 months imprisonment from 27 March 2010
  • On the 9th to 11th obtaining charges: 18 months imprisonment from 27 July 2010
  • On the money laundering charge: 2 years 8 months imprisonment from 27 September 2010
  • Overall non-parole period of 2 years 4 months from 27 March 2009, expiring 26 July 2011

Key Takeaways

  • Using a money laundering charge under s 400.4(1) of the Criminal Code (Cth) as a mechanism to cover proceeds not captured by individual fraud counts raises reliability concerns about the maximum penalty as a sentencing reference point, particularly where the conduct is more accurately characterised as tax fraud than as the kind of organised criminal money laundering the provision targets.
  • Section 4K of the Crimes Act (Cth) does not permit a sentencing court to collapse multiple discrete offences into a single undifferentiated sentence; each offence in a course of conduct must receive its own individual term, even where those terms are structured cumulatively.
  • Substantial unexplained prosecution delay between an offender's confession and eventual sentencing can reduce the weight properly accorded to general deterrence, particularly where the offender has demonstrably rehabilitated during that period.
  • Where the sentencing judge committed identifiable legal errors in method, the Court of Criminal Appeal will re-sentence afresh rather than simply adjust the existing sentence.
  • Significant personal reform, youth at the time of offending, and a gambling addiction acknowledged at the time were all treated as mitigating factors that, combined with the guilty plea discount, warranted a sentence at the lower end of the available range.

Legislation and Cases Referenced

Legislation
- Criminal Code (Cth), ss 134.2(1), 400.4(1)
- Crimes Act (Cth), s 4K
- Judiciary Act 1903 (Cth), s 68
- Crimes Act 1958 (Vic)

Cases
- R v Todd [1982] 2 NSWLR 517
- R v Gay [2006] NSWCCA 6
- R v MAK and MSK [2006] NSWCCA 381; 167 A Crim R 159
- Ansari v R [2007] NSWCCA 204; 70 NSWLR 89
- R v Huang and Sui [2007] NSWCCA 259; 174 A Crim R 370
- Markarian v The Queen [2005] HCA 25; 228 CLR 357
- Cahyadi v R [2007] NSWCCA 1; 168 A Crim R 41
- R v Bibaoui [1997] 2 VR 600
- Putland v R [2004] HCA 8; 218 CLR 174
- Pearce v The Queen [1998] HCA 57; 194 CLR 610
- R v Bahsa [2003] NSWCCA 36
- Ridley v R [2008] NSWCCA 324
- Bick v R [2006] NSWCCA 408
- Robertson v R [2007] NSWCCA 270
- Ly v R [2007] NSWCCA 28