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Court of Criminal Appeal 26 October 2010

R v David KERTEBANI; David KERTEBANI v R

[2010] NSWCCA 221

Fraud & dishonesty
CRIMINAL LAW SENTENCE APPEALS BY CROWN AND OFFENDER

Citation: R v David KERTEBANI; David KERTEBANI v R [2010] NSWCCA 221
Court: NSW Court of Criminal Appeal
Date: 26 October 2010
Judge(s): Simpson J, Hoeben J, Price J

Background

The respondent, a builder, pleaded guilty in the District Court to one charge of obtaining a financial advantage by deception under s 134.2(1) of the Criminal Code Act 1995 (Cth), with a second offence of dealing with proceeds of crime taken into account on sentence. The offending involved the lodgement of two false Business Activity Statements with the Australian Tax Office, in collusion with an ATO Compliance Verification Officer who corruptly processed the fraudulent claims. The scheme generated fictitious GST refunds based on claimed expenditure of approximately $5.7 million that was never actually incurred.

A total of $494,669 was paid into accounts the respondent controlled. Of that, he admitted to retaining approximately $307,555 as a benefit, after paying $130,000 to his co-offender. When the ATO's internal audit detected the fraud, the respondent and his co-offender attempted to conceal it by creating a fictitious paper trail, including lodging a further false BAS through a shelf company.

Sorby DCJ sentenced the respondent in the District Court to two years' imprisonment, with release on recognizance after 14 months, and made a reparation order of $307,555. Both the Crown and the respondent sought to appeal the sentence. The respondent also applied to adduce fresh evidence on appeal.

  • Whether the respondent's application to adduce fresh evidence on appeal met the "special and unusual circumstances" threshold
  • Whether the Crown appeal disclosed a latent error in the sentence imposed by Sorby DCJ
  • Whether the sentencing judge misunderstood the objective seriousness of the offence
  • Whether the sentencing judge failed to give adequate weight to the hardship that imprisonment would cause the respondent's family, particularly his wife and three young children

Decision

The Court of Criminal Appeal refused the respondent's application to adduce fresh evidence, finding that the circumstances did not meet the applicable threshold of being special and unusual. The Crown's appeal against the adequacy of the sentence was also dismissed, with the Court finding no latent error in Sorby DCJ's exercise of sentencing discretion.

On the respondent's own appeal, the Court rejected the argument that the sentencing judge had misunderstood the objective seriousness of the offence. Similarly, the Court declined to find error in the way Sorby DCJ assessed the impact of imprisonment on the respondent's family.

On the family hardship question, the Court applied the established principle that hardship to a prisoner's family operates in mitigation only where it is truly exceptional, going well beyond the ordinary hardship that inevitably arises when a breadwinner is imprisoned. Although the respondent's wife gave evidence of significant emotional and financial dependence, and psychological reports were placed before the sentencing judge, the Court noted that those same reports recommended referral to a psychiatrist, ongoing psychological support, and access to family support agencies. Those recommendations implicitly acknowledged that such support mechanisms were available. The sentencing judge's determination that exceptional circumstances had not been established involved a balancing of fact and degree that he was best placed to make, and the Court found no error in that conclusion.

Orders Made

  • The respondent's application to adduce fresh evidence is refused.
  • The Crown appeal against sentence is dismissed.
  • The respondent's application for leave to appeal against sentence is granted but the appeal is dismissed.

Key Takeaways

  • Family hardship will only mitigate an otherwise justified sentence of imprisonment where it is exceptional and goes substantially beyond the hardship that ordinarily results when a breadwinner is incarcerated, as confirmed by reference to R v Maslen and Shaw and R v Edwards.
  • The Court of Criminal Appeal confirmed that a sentencing judge's assessment of whether exceptional circumstances exist involves a balancing of fact and degree; an appellate court will not interfere unless error is established.
  • Psychological reports recommending that a prisoner's family be referred to support services and agencies may implicitly undercut an argument that no such support is available, which is a relevant consideration in the exceptional circumstances analysis.
  • No error was established in the sentencing judge's assessment of the objective seriousness of a fraud involving fictitious BAS claims of approximately $5.7 million and a benefit to the offender of over $307,000, which the respondent had not repaid at the time of sentence.
  • In dismissing both appeals, the Court left the original sentence undisturbed, confirming that neither the Crown nor the offender demonstrated the necessary error in the exercise of the sentencing discretion below.

Legislation and Cases Referenced

Legislation
- Criminal Code Act 1995 (Cth), ss 134.2(1), 400.4(1)
- Crimes Act 1914 (Cth), ss 16BA, 21B
- Crimes (Appeal and Review) Act 2001 (NSW)

Cases
- Director of Public Prosecutions (Commonwealth) v De La Rosa [2010] NSWCCA 194
- House v The King (1936) 55 CLR 499
- R v Ashton (2002) 137 A Crim R 73
- R v Edwards (1996) 90 A Crim R 510
- R v Ehrenburg (NSW CCA, 14 December 1990, unreported)
- R v Glyn Morgan Jones; R v Anthony Joseph Luis Hili [2010] NSWCCA 108
- R v Herrera (unreported, 6 June 1997)
- R v Maslen and Shaw (1995) 79 A Crim R 199
- R v Smith 44 SASR 587
- R v Wirth (1976) 14 SASR 291