Citation: McCall v Regina [2011] NSWCCA 34
Court: NSW Court of Criminal Appeal
Date: 19 April 2011
Judge(s): Hodgson JA, Adams J, Hall J (Hall J delivering the principal judgment)
Background
The appellant was convicted of two Commonwealth offences: obtaining a financial advantage by deception (Count 1) and attempting to obtain a financial advantage by deception (Count 2), contrary to the Criminal Code Act 1995 (Cth). He had incorporated 17 shell companies, registered each for GST purposes with fictitious directors and shareholders, and lodged 107 fraudulent Business Activity Statements claiming GST rebates to which none of the companies had any entitlement. The scheme ran from April 2004 to April 2005 and resulted in $530,257.33 being paid out by the ATO, with a further $183,820.67 attempted but not obtained.
The appellant's underlying motivation, as accepted at sentencing, was to keep a legitimate timber import business afloat after a series of genuine commercial disasters, including water-damaged stock and defective shipments from Chinese suppliers totalling hundreds of thousands of dollars in losses.
The District Court sentenced the appellant to a total of 7 years imprisonment with a non-parole period of 4 years and 3 months. The appellant sought leave to appeal, contending the sentences were manifestly excessive and that the sentencing judge had failed to apply the totality principle correctly when accumulating the two sentences.
Legal Issues
- Whether the total sentence of 7 years (with a non-parole period of 4 years and 3 months) was manifestly excessive given the objective seriousness of the offending and the appellant's personal circumstances.
- Whether the extent of accumulation of the sentences for Counts 1 and 2 was excessive and failed to give proper effect to the totality principle.
- Whether extension of time to file the grounds of appeal (filed more than two years out of time) should be granted.
- Whether fresh evidence concerning the use of the defrauded funds should be admitted on appeal.
Decision
The Court of Criminal Appeal rejected the argument that the overall sentences were manifestly excessive. Hall J found the offending was close to the upper range of objective seriousness: the scheme was sophisticated, sustained over more than a year, involved 17 fictitious companies and fabricated identity documents, and targeted Commonwealth revenue for a substantial sum. The motive of salvaging a struggling business, while mitigatory to some extent, did not displace the gravity of the fraud.
On the question of accumulation, however, the Court found that the sentencing judge had allowed an excessive degree of accumulation between the two sentences, resulting in a total term that was disproportionate when the totality principle was applied. The Court applied the principles from Pearce v The Queen (1998) 194 CLR 610, which requires that accumulated sentences for related offending be structured so the overall punishment is just and appropriate for the totality of the criminal conduct.
Regarding the extension of time, the Court acknowledged that no satisfactory explanation had been provided for the lengthy delay of over two years in filing the grounds of appeal. Nonetheless, because a genuine error in the accumulation of sentences was identified, the Court exercised its discretion to grant the extension on that limited basis.
The fresh evidence concerning the diversion of funds into the business was received on the voir dire but did not alter the outcome. The Court proceeded on the basis of the facts as found by the sentencing judge, reducing the overall sentence by restructuring the accumulation rather than revisiting the underlying findings of fact.
Orders Made
- Extension of time to file the application for leave to appeal against sentence granted.
- Appeal allowed in part, on the ground of excessive accumulation of sentences for Counts 1 and 2.
- Sentence in respect of Count 1 set aside and the appellant re-sentenced as follows:
- Count 2: term of 2 years imprisonment commencing 16 August 2007, expiring 15 August 2009 (unchanged).
- Count 1: term of 5 years and 6 months imprisonment commencing 16 February 2008 and expiring 15 August 2013.
- Aggregate non-parole period of 3 years and 9 months commencing 17 August 2007 and expiring 16 May 2011.
- Total effective sentence reduced from 7 years to 6 years.
Key Takeaways
- The Court of Criminal Appeal confirmed that large-scale, sophisticated GST fraud involving fictitious companies and false identity documents will be assessed as close to the upper range of objective seriousness, even where the offender's underlying motive was to preserve a legitimate business.
- Under the totality principle established in Pearce v The Queen, accumulated sentences for related offences must produce a total term that is proportionate to the overall criminality. An excessive degree of accumulation is a sentencing error that warrants appellate intervention even where each individual sentence is otherwise sound.
- A 20% discount for early guilty pleas entered in the Local Court was affirmed as appropriate in the circumstances, reflecting the utilitarian value of those pleas.
- Extension of time to appeal was granted despite a delay of more than two years, because the Court identified a specific, correctable sentencing error. This demonstrates that unexplained delay does not automatically bar relief where a clear error is apparent on the face of the sentences.
- The total sentence was reduced from 7 years to 6 years (non-parole period from 4 years 3 months to 3 years 9 months), reflecting the correction to accumulation rather than any finding that the individual sentences were too severe.
Legislation and Cases Referenced
Legislation
- Criminal Code Act 1995 (Cth), ss 11.1(1), 134.1(1)
- Crimes Act 1914 (Cth), ss 4AA, 4B(1), 16BA, 21B
- Financial Transaction Reports Act 1988 (Cth), ss 24(1), 24(2)
Cases
- Pearce v The Queen (1998) 194 CLR 610
- El Chaar v Regina [2007] NSWCCA 16