Citation: R v Glyn Morgan JONES; R v Anthony Joseph Luis HILI [2010] NSWCCA 108
Court: NSW Court of Criminal Appeal
Date: 14 May 2010
Judge(s): McClellan CJ at CL, Howie J, Rothman J (Rothman J delivered the principal judgment; the others agreed)
Background
Two company directors pleaded guilty to serious tax fraud offences involving the creation of false invoices and the payment of fabricated management and consultancy fees. Through an international round-robin scheme, both men channelled company funds back into their own personal accounts while lodging false tax returns that understated their income and the income of their companies. The total tax shortfall for one offender was approximately $398,000; the other's conduct involved additional charges of defrauding the Commonwealth and dealing with the proceeds of crime.
Both were sentenced in the District Court on 13 November 2009. Each received a term of imprisonment of 18 months, with a recognizance release order (a form of supervised early release) after only 7 months. The Commonwealth Director of Public Prosecutions appealed both sentences to the Court of Criminal Appeal, arguing the sentences were manifestly inadequate.
Legal Issues
- Whether the District Court sentences were manifestly inadequate and therefore warranted intervention on Crown appeal
- How to calculate and proportion the non-parole period (the minimum time to be served) relative to the head sentence in Commonwealth fraud matters
- What weight should be given to mitigating factors such as pleas of guilty, offender assistance to authorities, first-time imprisonment, rehabilitation prospects, and alcohol-related issues
- Whether the sentencing judge's exercise of discretion had miscarried in a manner requiring correction
Decision
The Court of Criminal Appeal unanimously found that the District Court sentences were manifestly inadequate and that the sentencing judge's exercise of discretion had miscarried. Rothman J, with whom the other judges agreed, determined that a more severe sentence was warranted in both cases.
The Court accepted that significant mitigating factors applied, including each offender's guilty plea, assistance provided to authorities, first-time imprisonment, good rehabilitation prospects, and a need to address alcohol issues. These factors justified a reduction from what might otherwise have been a higher sentence, and also supported finding "special circumstances" warranting a non-parole period as low as 50% of the head sentence (but no lower).
On the question of sentencing proportionality, the Court engaged with how to set the minimum term relative to the total sentence in Commonwealth matters. Rothman J held that the recognizance release order after just 7 months of an 18-month term, representing less than 40% of the head sentence, fell outside the range that could be justified even on the most generous account of the mitigating factors.
The revised sentences significantly increased the head terms while preserving early release at the 50% point. The Court treated the two offenders differently: Jones faced multiple charges and received consecutive terms, while Hili's conduct was captured in a single charge with a longer head sentence but the same 50% release point.
Orders Made
Hili:
- Appeal allowed; District Court sentence set aside
- Sentenced to 3 years' imprisonment commencing 13 November 2009
- To be released after 18 months on a recognizance release order (self surety $1,000; good behaviour for the balance of the term)
Jones:
- Appeal allowed in part and otherwise dismissed; District Court sentences set aside
- For the Commonwealth fraud offence (s 29D, Crimes Act 1914 (Cth)): fixed term of 12 months commencing 13 November 2009
- For the obtaining financial advantage by deception offence (s 134.2(1), Criminal Code Act 1995 (Cth)): 2 years and 6 months commencing 13 May 2010
- To be released after 18 months' total imprisonment (i.e. on 13 May 2011) on a recognizance release order (self surety $1,000; good behaviour for the balance)
Key Takeaways
- The Court of Criminal Appeal confirmed that a non-parole period representing less than approximately 40% of the head sentence will ordinarily fall outside an acceptable range in Commonwealth fraud matters, even where substantial mitigation exists.
- A combination of first-time imprisonment, genuine rehabilitation prospects, assistance to authorities, and a guilty plea can together constitute "special circumstances" justifying a non-parole period at or near 50% of the head sentence, but the Court treated 50% as a floor rather than a point for further reduction.
- Manifestly inadequate sentences in serious tax fraud cases will attract Crown appeal intervention even where the sentencing judge clearly acknowledged the relevant mitigating factors, if the resulting term fails to reflect the objective gravity of the offending.
- The scheme involved systematic use of false invoices, international round-robin transactions, and deliberate under-declaration of personal income, facts the Court regarded as significantly aggravating the objective seriousness of the offences.
- Following this decision, the matter was referred to an enlarged Full Court of the High Court (on 30 July 2010, [2010] HCATrans 194), indicating the sentencing principles engaged here attracted attention at the highest appellate level.
Legislation and Cases Referenced
Legislation:
- Crimes Act 1914 (Cth), including ss 20(1)(b) and 29D
- Criminal Code Act 1995 (Cth), including ss 134.2(1) and 400.4(1)
Cases:
- Bernier v R (1998) 102 A Crim R 44
- FS v R [2009] NSWCCA 301
- L. Vogel and Son Pty Ltd v Anderson (1967) 120 CLR 157
- Nahlous v R [2010] NSWCCA 58
- Pearce v R (1998) 194 CLR 610
- R v CAK & CAL; ex parte Cth DPP [2009] QCA 23
- R v Joseph Sukkar [2006] NSWCCA 92; (2006) 172 A Crim R 151
- R v JW [2010] NSWCCA 49
- R v Robertson [2008] QCA 164
- R v Ruha, Ruha & Harris; ex parte Cth DPP [2010] QCA 10
- R v Tran [2007] QCA 221; 172 A Crim R 436
- R v Viana [2001] NSWCCA 171
- SZ v Regina [2007] NSWCCA 19
- The Queen v Woods [2009] NTCCA 2
- Thorn v R [2009] NSWCCA 294