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Court of Criminal Appeal 17 March 2017

Director of Public Prosecutions (Cth) v Pratten (No 2)

[2017] NSWCCA 42

Also reported as (2017) 94 NSWLR 194
Fraud & dishonesty
CRIMINAL LAW FEDERAL OFFENCE PROSECUTION APPEAL AGAINST SENTENCE SENTENCE IMPOSED FOLLOWING SECOND TRIAL FEDERAL OFFENCE PROSECUTION APPEAL AGAINST SENTENCE

Citation: Director of Public Prosecutions (Cth) v Pratten (No 2) [2017] NSWCCA 42
Court: Court of Criminal Appeal, New South Wales
Date: 17 March 2017
Judges: Basten JA; Campbell J; N Adams J

Background

The respondent operated as an insurance broker in Australia, channelling premiums through trust companies in Vanuatu. Over seven financial years (2003 to 2009), he received more than $4.5 million paid to him or at his direction, none of which was declared as income. The tax benefit from that non-disclosure was calculated at just over $2 million.

The respondent was charged with seven counts of obtaining a financial advantage by deception under the Commonwealth Criminal Code. A first trial produced convictions that were subsequently set aside on appeal. A second trial again resulted in convictions on all seven counts. In April 2016, the trial judge imposed a total effective sentence of five years imprisonment with a non-parole period of two years.

Separately, after the respondent's arrest in 2010, the Commonwealth Director obtained a restraining order over various assets including a fishing boat. The respondent was charged and later convicted in 2016 of attempting to remove the boat from Australia in contravention of the Proceeds of Crime Act 2002 (Cth), receiving a fine of $10,000. The Commonwealth Director appealed both sentences as manifestly inadequate.

  • Whether the common law doctrine of "double jeopardy" could be applied as a mitigating factor when resentencing after a second trial, under the framework of s 16A of the Crimes Act 1914 (Cth)
  • Whether family hardship as a mitigating factor under s 16A(2)(p) of the Crimes Act requires a finding of "exceptional circumstances" consistent with the general law principle, and whether the evidence supported its application here
  • Whether the sentencing judge erred in assuming, without evidentiary foundation, that the respondent's tax liabilities had been repaid
  • Whether the respondent was entitled to treatment as a first-time offender, given that some charged offences predated others and that a prior conviction existed
  • Whether sentencing delay of itself warranted mitigation of sentence
  • Whether the sentences imposed for both the tax offences and the Proceeds of Crime Act contravention were manifestly inadequate

Decision

Double jeopardy. The Court accepted that the general law principle of double jeopardy may underpin some constraints on resentencing discretion after a second trial. However, applying the High Court's decision in Bui v DPP (Cth), the Court held that s 16A of the Crimes Act governs federal sentencing comprehensively and does not accommodate that general law principle. A sentencing judge may take into account the offender's actual mental condition (for example, demonstrated distress and anxiety), but cannot apply a presumed or general distress arising simply from the fact of a second trial.

Family hardship. The Court expressed doubt about whether the general law requirement that family hardship must involve "exceptional circumstances" before it can mitigate sentence is consistent with the language of s 16A(2)(p). Cases applying that gloss to federal sentencing may have added an unwarranted overlay on the statute. Regardless, the sentencing judge erred because the evidence before the court did not establish that imprisonment would significantly and adversely affect the respondent's daughters. The mitigating weight given to family hardship was therefore not supported.

Unpaid tax liabilities. The trial judge assumed, without any evidentiary foundation, that the respondent's tax liabilities had been repaid. The Court found this assumption was simply wrong. Because the assumption reduced the effective seriousness of the offending in the judge's analysis, it contributed to a sentence that was unduly lenient.

First offender status, delay, and manifest inadequacy. The Court found it was an error to treat the respondent as a first-time offender entitled to the associated leniency. The fact that earlier offences had not yet resulted in a conviction at the time the later offences were committed does not mean those earlier offences are irrelevant to character and antecedents under s 16A(2)(m). There was also a prior conviction that should have curtailed the extent of any leniency. On the question of delay, the Court confirmed that prosecutorial delay does not of itself reduce a sentence; only a small part of the six-year period from charge to sentencing was attributable to unreasonable prosecutorial conduct. Taken together, these errors supported a finding that the sentences were manifestly inadequate, and the Court resentenced the respondent. Similar errors in the Proceeds of Crime sentencing (including misapplication of the prior offending analysis and unwarranted weight given to delay and the prospect of a lower court disposal) also warranted intervention.

Orders Made

  • The appeal against the sentences imposed for seven counts of obtaining a financial advantage by deception (s 134.2(1) Criminal Code (Cth)) was allowed, and those sentences were set aside.
  • The appeal against the sentence imposed for the Proceeds of Crime Act contravention (s 37(1) Proceeds of Crime Act 2002 (Cth) and s 11.1(1) Criminal Code (Cth)) was allowed, and that sentence was set aside.
  • The respondent was resentenced as follows:
  • Proceeds of Crime offence: 6 months imprisonment, commencing 20 January 2016 and expiring 19 July 2016.
  • Counts 1 and 2 (tax): 3 years imprisonment, commencing 20 May 2016 and expiring 19 May 2019.
  • Count 3 (tax): 3 years imprisonment, commencing 20 November 2016 and expiring 19 November 2019.
  • Count 7 (tax): 3 years 6 months imprisonment, commencing 20 May 2017 and expiring 19 November 2020.
  • Counts 4, 5 and 6 (tax): 5 years imprisonment, commencing 20 May 2017 and expiring 19 May 2022.
  • A single non-parole period of 3 years 9 months was fixed, commencing 20 January 2016 and continuing until 19 October 2019.
  • The respondent was declared first eligible for release on parole on 19 October 2019.

Key Takeaways

  • Section 16A of the Crimes Act 1914 (Cth) governs federal sentencing and does not incorporate the common law double jeopardy principle as a standalone mitigating factor on resentencing after a second trial; only actual, demonstrated mental distress may be taken into account under s 16A(2)(m).
  • The Court of Criminal Appeal cast doubt on whether the general law requirement for "exceptional circumstances" before family hardship can reduce a federal sentence is consistent with the text of s 16A(2)(p), suggesting prior cases may have imposed an unwarranted gloss on the provision.
  • Where a sentencing judge makes a factual assumption favourable to an offender, that assumption must have an evidentiary foundation; an unsupported assumption that financial obligations have been discharged can render a sentence manifestly inadequate.
  • Under s 16A(2)(m), the sentencing court must consider the character and antecedents of the offender, which includes earlier offending conduct even where no conviction for those earlier matters had been recorded at the time of the later offences.
  • Prosecution delay does not automatically warrant a reduction in sentence; the principle is that sentence should not be reduced simply to express disapproval of prosecutorial conduct.

Legislation and Cases Referenced

Legislation
- Crimes Act 1914 (Cth), ss 4AA, 4B, 4J, 16A, 19AB–19AK, 19AN
- Criminal Code Act 1995 (Cth), ss 11.1, 134.2
- Proceeds of Crime Act 2002 (Cth), ss 17, 37
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 44
- Judiciary Act 1903 (Cth), ss 68, 79, 80

Key Cases
- Bui v Director of Public Prosecutions (Cth) (2012) 244 CLR 638; [2012] HCA 1
- Director of Public Prosecutions (Cth) v De La Rosa (2010) 79 NSWLR 1; [2010] NSWCCA 194
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