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Court of Criminal Appeal 3 December 2014

Liles v R (Cth)

[2014] NSWCCA 289

Fraud & dishonesty
CRIMINAL LAW SENTENCE APPEAL OFFENDING OBJECTIVELY SERIOUS NEED TO RE SENTENCE EXERCISE OF SENTENCING DISCRETION

Citation: Liles v R (Cth) [2014] NSWCCA 289
Court: NSW Court of Criminal Appeal
Date: 3 December 2014
Judges: Hoeben CJ at CL; RA Hulme J; Davies J

Background

The applicant was an accountant who pleaded guilty to four counts of conspiracy relating to two separate tax avoidance schemes. She had established structures involving Vanuatu-based entities to disguise Australian company profits as legitimate business expenses, allowing funds to be funnelled offshore and then returned to shareholders in Australia free of Australian tax obligations. Two sets of co-conspirators were involved across the four counts, with a third conspiracy handled separately as a schedule offence.

The total tax liabilities avoided across the three conspiracies exceeded $3.7 million. The offending spanned from 1997 to 2006, and the applicant's role was central throughout: she prepared false tax returns and accounts, established offshore entities, and provided ongoing operational advice to the schemes.

Schmidt J sentenced the applicant in October 2012 to a head sentence of 8 years and 3 months, with a non-parole period (expressed as a recognizance release order) of 4 years and 11 months. The applicant sought leave to appeal that sentence on multiple grounds, including her deteriorating medical condition while in custody.

  • Whether the sentencing judge correctly took into account the schedule offences under s 16BA of the Crimes Act 1914 (Cth)
  • Whether the sentencing judge made a factual error in finding the applicant received personal gain beyond professional fees
  • Whether the sentencing discretion miscarried because the applicant's serious medical conditions had not been adequately treated in custody, contrary to the assumption underlying the original sentence
  • Whether the sentencing judge gave adequate weight to the principle of equal justice, particularly by comparison with co-conspirators
  • Whether the sentence was otherwise manifestly excessive

Decision

The Court of Criminal Appeal granted leave to appeal and found that the sentencing discretion had miscarried on more than one ground, requiring resentencing. Most significantly, the Court accepted that the applicant's medical conditions had not been adequately managed in custody. The original sentence had proceeded on the assumption that her conditions would receive appropriate treatment in gaol, but evidence demonstrated that assumption had not held. This warranted fresh consideration of the sentence in light of her current health.

The Court also found error in the way the schedule offences had been taken into account and in the application of the equal justice principle when compared with co-conspirators. These errors, taken together, justified setting aside the original sentence entirely and re-exercising the sentencing discretion afresh.

In re-sentencing, the Court confirmed that the offending remained objectively serious, warranting substantial terms of imprisonment and the need for general deterrence. The applicant's age (65 at the time of original sentencing), significant physical disabilities, and a combined discount of 30 percent for assistance to authorities and facilitation of the course of justice were all taken into account. The resulting head sentence was reduced to 5 years and 9 months, with a recognizance release order set at 3 years and 6 months from the commencement date.

The three judges were unanimous, with Hulme J and Davies J agreeing with the reasons of Hoeben CJ at CL without separate elaboration.

Orders Made

  • The sentences imposed by Schmidt J on 18 October 2012 were quashed.
  • In lieu thereof, the following sentences were imposed:
  • Count 1: imprisonment for 1 year and 7 months, commencing 18 October 2012 and expiring 17 May 2014
  • Count 2: imprisonment for 1 year and 7 months, commencing 18 May 2014 and expiring 17 December 2015
  • Count 3: imprisonment for 4 months, commencing 18 January 2015 and expiring 17 May 2015
  • Count 4: imprisonment for 3 years and 2 months, commencing 18 May 2015 and expiring 17 July 2018
  • The applicant was to be released on 17 April 2016 upon entering a recognizance to be of good behaviour for the balance of the term, without lodging cash security.

Key Takeaways

  • A sentence may miscarry where it proceeds on an assumption about an offender's medical treatment in custody that subsequently proves unfounded; the Court of Criminal Appeal treated this as a basis for re-sentencing, not merely variation.
  • Under the equal justice principle, disparity between sentences imposed on co-conspirators is a relevant sentencing consideration, and inadequate attention to that principle can constitute error.
  • Where schedule offences under s 16BA of the Crimes Act 1914 (Cth) are not handled correctly, this can infect the overall sentencing exercise sufficiently to require resentencing.
  • In re-exercising the sentencing discretion, the Court assessed a combined discount of 30 percent for the applicant's assistance to authorities and her facilitation of the course of justice, reflecting that several charges were withdrawn and others dealt with by way of schedule.
  • Notwithstanding a substantial sentence reduction, the Court affirmed that large-scale, professionally facilitated tax fraud conspiracies against the Commonwealth remain objectively serious offences requiring general deterrence.

Legislation and Cases Referenced

Legislation:
- Crimes Act 1914 (Cth), ss 16A(2), 16BA, 29B, 29D, 86(1)
- Criminal Code 1995 (Cth), s 135.4(3)

Cases:
- Baxter v The Queen [2007] NSWCCA 237; 173 A Crim R 284
- Douar v The Queen [2005] NSWCCA 455; 159 A Crim R 154
- Hili v R; Jones v R [2010] HCA 45; 242 CLR 520
- Kentwell v The Queen [2014] HCA 37
- R v Boughen; R v Cameron [2012] NSWCCA 17
- R v Liles [2012] NSWSC 1249 (the original sentencing decision)
- R v Ronen [2006] NSWCCA 123; 161 A Crim R 300