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Court of Criminal Appeal 24 November 2014

Khoury v R

[2014] NSWCCA 272

Fraud & dishonesty
CRIMINAL LAW APPEAL APPEAL AGAINST SENTENCE PARITY WHERE EXTENT OF APPLICANT'S ILL HEALTH NOT KNOWN AT SENTENCING

Citation: Khoury v R [2014] NSWCCA 272
Court: Court of Criminal Appeal, New South Wales
Date: 24 November 2014
Judges: Bathurst CJ; Adams J; R A Hulme J

Background

The applicant was the sole director and shareholder of a car dealership known as European Car Specialists, operated through a company called Chanti Pty Limited. Between 2008 and 2009, he orchestrated a series of frauds involving the sale of consignment vehicles, diverting approximately $1.3 million in sale proceeds away from owners and financiers. He also made false statements to the Office of Fair Trading to conceal the absence of a required trust account.

Two employees, both of whom worked under the applicant's direction, pleaded guilty to being accessories after the fact to the primary fraud. Their role was limited to making false statements to customers to delay detection of the applicant's scheme. Neither employee received a custodial sentence: one was placed on a three-year good behaviour bond, and the other on a two-year good behaviour bond with an additional compensation order of $40,000.

The applicant, having pleaded guilty, received a total effective sentence of four years and six months, with a non-parole period of two years and six months. He sought leave to appeal on two grounds: first, that the disparity between his sentence and those of the accessories gave rise to a justifiable sense of grievance; and second, that fresh evidence of his deteriorating health justified a reduction in his sentence.

  • Whether the difference between the applicant's custodial sentence and the non-custodial sentences received by the accessories gave rise to a justifiable sense of grievance warranting a parity-based reduction.
  • Whether fresh evidence of the applicant's serious ill-health, not fully known at the time of sentencing, rendered the original sentence manifestly excessive.
  • Whether the quality of the applicant's medical care in custody was inadequate in any material sense.

Decision

On the parity ground, Adams J and R A Hulme J each concluded that the applicant could not sustain a justifiable sense of grievance. The culpability of the accessories was, objectively, far below that of the applicant. The applicant was the architect of the entire fraud and the person who pocketed the proceeds. The accessories played a subsidiary and delayed role, assisting only after the frauds had been committed and obtaining no financial benefit themselves. The difference in outcome was fully explained by this difference in culpability, applying the principle from Green v The Queen; Quinn v The Queen (2011) 244 CLR 462.

Bathurst CJ and R A Hulme J expressed a minor disagreement with Adams J on whether the accessories were part of the same criminal enterprise. R A Hulme J considered they were, while Adams J treated them as standing apart from the principal offending. All three judges agreed that nothing turned on this characterisation for the purposes of the appeal.

On the fresh evidence ground, the Court accepted evidence from Dr Dhital concerning the applicant's serious cardiac and other health conditions. The Court acknowledged that the full extent of the applicant's ill-health had not been known at sentencing. However, Adams J found that the conditions did not make imprisonment significantly more onerous in a physical sense beyond what the sentencing judge had already taken into account when reducing the non-parole period on the basis of the applicant's psychiatric condition. The applicant's anxiety about his medical care was acknowledged, but the Court found no basis to conclude that the care being provided fell short of the high duty assumed by the State upon imprisoning him.

Orders Made

  • Leave to appeal granted.
  • Appeal dismissed.

Key Takeaways

  • A parity-based challenge requires the applicant to demonstrate a justifiable sense of grievance, not merely a difference in outcome. Where co-offenders occupy substantially different roles and levels of culpability, a wide sentencing disparity will not ordinarily support such a grievance.
  • Accessories after the fact who assist in concealing a completed fraud, receive no proceeds, and act under the direction of the principal offender may properly receive sentences far below those imposed on the principal, even where the maximum penalties are the same.
  • Fresh evidence of ill-health admitted on appeal does not automatically warrant a reduced sentence. The Court of Criminal Appeal will assess whether the health condition materially increases the burden of imprisonment beyond what the sentencing court already contemplated.
  • Where the sentencing court has already adjusted the non-parole period to account for a prisoner's vulnerability in custody, additional evidence of related health concerns will not necessarily justify a further reduction unless that evidence demonstrates a meaningfully greater burden of imprisonment.
  • In dismissing the appeal, the Court proceeded on the basis that the State's duty of care towards prisoners would be fulfilled, declining to treat anxiety about access to medical care as a sufficient ground for intervention absent evidence of material inadequacy.

Legislation and Cases Referenced

Legislation:
- Crimes Act 1900 (NSW), ss 176A (fraud by company director, repealed), 178BB(1) (false statements with intent to obtain financial advantage, repealed)
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 9 (good behaviour bonds)

Cases:
- Green v The Queen; Quinn v The Queen [2011] HCA 49; 244 CLR 462 (parity principle)
- Iglesias v R [2006] NSWCCA 261
- Jimmy v R [2010] NSWCCA 60; (2010) 77 NSWLR 540