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18
Court of Criminal Appeal 27 February 2012

R v Boughen; R v Cameron

[2012] NSWCCA 17

Also reported as (2012) 215 A Crim R 476
Fraud & dishonesty
CRIMINAL LAW CROWN APPEAL SENTENCING CONSPIRING TO DEFRAUD THE COMMONWEALTH PLEA OF GUILTY MANIFESTLY INADEQUATE SENTENCE

Citation: R v Boughen; R v Cameron [2012] NSWCCA 17
Court: NSW Court of Criminal Appeal
Date: 27 February 2012
Judges: Simpson J (primary); Hislop J (agreeing); Latham J (agreeing)

Background

The two respondents were television industry professionals, one a writer and one a producer, who had operated a business partnership since the mid-1980s through a company called Concept Television Productions. From around 1990, their accountant introduced them to a tax evasion scheme involving false deduction claims made against declared income, channelled through Vanuatu-based companies. Payments were returned to the respondents and recorded as loans rather than income, thereby avoiding taxation.

Both respondents maintained they were unaware of the scheme's dishonest nature until 1997. The Crown accepted this, and the charge period ran from 1 July 1997 to 31 July 2004. Over that period, the two men personally evaded over $1 million in income tax between them, with their company evading a further $727,000. Including administrative penalties and interest, the ATO assessments against the respondents individually exceeded $1.8 million each.

Each respondent pleaded guilty to two counts: conspiracy to defraud the Commonwealth (covering 1997 to May 2001), and conspiracy dishonestly to cause a loss to the Commonwealth (covering May 2001 to July 2004). In the District Court, Finnane DCJ sentenced each to two years' imprisonment, to be served by way of an Intensive Correction Order (ICO). The Commonwealth Director of Public Prosecutions appealed, arguing both the length of the sentences and the ICO orders were manifestly inadequate.

  • Whether the sentences of two years imposed on each respondent were manifestly inadequate in light of the objective seriousness of the offending and the quantum of tax evaded.
  • Whether it was appropriate to order that the sentences be served by way of Intensive Correction Order rather than full-time custody.
  • How to assess objective criminality where two counts, governed by different statutory regimes, captured a single continuous conspiracy.
  • What weight to give to mitigating factors including guilty pleas, co-operation with authorities, delay, personal circumstances, and compliance with ICO conditions already underway.

Decision

The Court of Criminal Appeal allowed the Crown appeal, quashing the sentences imposed below and replacing them with terms requiring full-time custodial imprisonment. Simpson J, with whom Hislop J and Latham J agreed, found the original sentences manifestly inadequate, both in their length and in the decision to avoid full-time custody through the ICO mechanism.

On objective seriousness, the Court emphasised that the offending spanned seven years, involved deliberate and ongoing dishonesty after the respondents became aware of the scheme's fraudulent nature, and caused substantial loss to the Commonwealth. The Court noted that, notwithstanding mitigating factors, the aggregate tax evaded was significant and the conduct was sustained and calculated.

The Court acknowledged several mitigating factors carrying real weight: the early guilty pleas, the co-operation with authorities through formal undertakings under s 21E of the Crimes Act 1914 (Cth), the substantial delay between investigation and sentencing, the respondents' good character, and the financial consequences they had already suffered, including losing the family home. A 40% reduction from the notional starting point was applied to reflect these matters.

A further reduction was also made to account for the respondents' compliance with their ICO conditions during the period the appeal was pending, and the additional delay that had accrued. The Court arrived at a total sentence of three years for each respondent, divided equally across the two counts, with a recognizance release order to operate after 18 months of actual imprisonment.

Orders Made

For each respondent (Boughen and Cameron):

  • Crown appeal allowed; sentences imposed below quashed.
  • Count 1: imprisonment for 1 year and 6 months, commencing 27 February 2012, expiring 26 August 2013.
  • Count 2: imprisonment for 1 year and 6 months, commencing 27 August 2013, expiring 26 February 2015.
  • Recognizance release order to operate after 18 months (from 26 August 2013), on condition that each respondent comply with the conditions specified in s 20(1)(a) of the Crimes Act 1914 (Cth).

Key Takeaways

  • A two-year sentence served by way of Intensive Correction Order was held manifestly inadequate for a seven-year tax evasion conspiracy involving personal tax shortfalls exceeding $500,000 each, even where significant mitigating factors were present.
  • Where two statutory counts capture a single continuous course of criminal conduct divided only by legislative change, the lesser of the two applicable maximum penalties governs the sentencing range for the entire period.
  • Compliance with an Intensive Correction Order during a pending Crown appeal can be treated as a further mitigating factor warranting a modest reduction in the sentence ultimately imposed on resentencing.
  • The Court of Criminal Appeal confirmed that sustained white-collar offending against the Commonwealth, committed with full knowledge of its dishonest character, ordinarily warrants full-time custody absent truly exceptional circumstances.
  • A 40% reduction from the notional starting point was applied to reflect the combination of early guilty pleas, co-operation with investigators, delay, prior good character, and consequential financial hardship, illustrating how multiple overlapping mitigating factors are assessed in aggregate rather than individually.

Legislation and Cases Referenced

Legislation:
- Crimes Act 1914 (Cth), ss 16G, 17A, 19AC, 19AD, 20, 21E, 29B, 29D, 86
- Criminal Code 1995 (Cth), s 135.4(3)
- Criminal Appeal Act 1912 (NSW), s 5D
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 7
- Crimes (Appeal and Review) Act 2001 (NSW), s 68A
- Crimes (Sentencing Legislation) Amendment (Intensive Correction Orders) Act 2010

Cases:
- Agius v R [2011] NSWCCA 119
- Bui v Director of Public Prosecutions (Cth) [2012] HCA 1
- Director of Public Prosecutions (Cth) v De La Rosa [2010] NSWCCA 194
- Hili v The Queen; Jones v The Queen [2010] HCA 45
- DPP (Cth) v Goldberg [2001] VSCA 107
- DPP (Cth) v Gregory [2011] VSCA 145
- R v Cameron [2002] HCA 6; 209 CLR 339
- R v Caradonna [2000] NSWCCA 398