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Local Court 13 July 2017

NSW Police v Scott John Seward

[2017] NSWLC 16

Fraud & dishonesty
CRIMINAL LAW SENTENCE ASSESSMENT OF OBJECTIVE SERIOUSNESS VICTIM ORGANISATIONS ROLE IN OFFENDING ASSISTANCE TO AUTHORITIES VOLUNTARY DISCLOSURE OF GUILT

Citation: NSW Police v Scott John Seward [2017] NSWLC 16
Court: Local Court of NSW (Downing Centre)
Date: 13 July 2017
Judge(s): Deputy Chief Magistrate Christopher O'Brien

Background

The offender was the Chief Executive Officer of an NRL club who pleaded guilty to one charge of dishonestly obtaining a financial advantage by deception under s 192E(1)(b) of the Crimes Act 1900. A second charge of publishing false or misleading material to obtain a financial advantage (s 192G(b)) was taken into account on a Form 1, meaning the court considered it during sentencing without recording a separate conviction for it.

The offending arose from the club's pre-existing salary cap breaches, which the offender inherited when he took on the CEO role. He had no prior knowledge of the unlawful third-party payment arrangements that had been made with players and their managers before his appointment. When he approached the Board of Directors for guidance, he was told to fix the problem or be replaced. He had no formal employment contract and was his family's sole income earner.

Facing pressure from players and managers demanding outstanding cash payments, the offender arranged for false invoices to be submitted by club supporters and authorised those invoices for payment. The money obtained was used to pay players and managers. The total amount across the offending was approximately $370,000. The offender received none of the money personally.

  • What was the appropriate objective seriousness of the offending, given the institutional context in which it occurred?
  • What weight should be given to the offender's personal circumstances, including the coercive conduct of the Board of Directors and his lack of experience as a CEO?
  • What weight should be given to the offender's early plea of guilty, his assistance to authorities, and his voluntary disclosure of guilt?
  • Whether the offender's significant media exposure constituted extra-curial punishment relevant to sentence.
  • Whether the charge should be dismissed without conviction under s 10(1)(b) of the Crimes (Sentencing Procedure) Act 1999, conditioned on a good behaviour bond.

Decision

Deputy Chief Magistrate O'Brien assessed the objective seriousness of the offending as low to moderate. While the total amount involved was not trivial, the offender did not personally benefit, he inherited the unlawful arrangements created by others, and he was operating under significant institutional pressure from a Board that provided no support. The court found that the Board's conduct, including its apparent prior knowledge of the problem and its directive to "fix it or be replaced," materially contributed to the circumstances in which the offending occurred.

The court gave considerable weight to the offender's subjective circumstances: his early plea at the first available opportunity, his extensive cooperation with both the NRL and police investigators, and what the court characterised as a voluntary disclosure of guilt. These factors, particularly the assistance to authorities, were treated as attracting significant leniency under s 23 of the Crimes (Sentencing Procedure) Act. The court found that specific deterrence had no role to play and that the offender had good prospects of rehabilitation.

The court also accepted that the offender had been subjected to substantial adverse media coverage and that this constituted extra-curial punishment, meaning punishment effectively inflicted outside the formal court process, which is a recognised mitigating factor in NSW sentencing law.

Drawing on R v Mauger [2012] NSWCCA 51, the court held that a s 10 dismissal conditional on a good behaviour bond was capable of satisfying the sentencing objectives of denunciation and general deterrence in the particular circumstances of this case. The court stated that without the offender's significant assistance, a conviction with a s 9 bond would have been imposed.

Orders Made

  • Sequence 1 (principal charge, s 192E(1)(b)): Offence found proved; deemed inexpedient to inflict punishment; charge dismissed under s 10(1)(b) of the Crimes (Sentencing Procedure) Act 1999, conditional on the offender entering into a two-year good behaviour bond. No conviction recorded.
  • Sequence 2 (s 192G(b) charge): Taken into account on a Form 1.

Note: A Crown inadequacy appeal (a prosecution appeal on the ground that the sentence was inadequate) was dismissed by the District Court on 3 November 2017.

Key Takeaways

  • A section 10 dismissal without conviction remains available for serious fraud offences where the combination of low objective seriousness, significant assistance to authorities, voluntary disclosure, and compelling personal circumstances justifies that outcome.
  • Under s 23 of the Crimes (Sentencing Procedure) Act 1999, substantial assistance to investigating authorities can, in appropriate cases, reduce the sentencing outcome from a conviction and bond to a dismissal without conviction.
  • Extra-curial punishment through adverse media coverage is a recognised mitigating factor in NSW sentencing, capable of reducing the weight given to general and specific deterrence.
  • Where a victim organisation's own conduct, such as a board's direction to conceal pre-existing breaches and its failure to support a newly appointed CEO, contributed to the circumstances of the offending, that institutional context is relevant to the assessment of objective seriousness.
  • Consistent with R v Mauger, the imposition of a s 10 bond without conviction is not automatically lenient: failure to comply carries serious consequences, and such a disposition can still serve the sentencing purposes of denunciation and general deterrence in the right case.

Legislation and Cases Referenced

Legislation
- Crimes Act 1900 (NSW), ss 192E(1)(b), 192G(b)
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 10, 10A, 21A, 23

Cases
- AB v The Queen (1999) 198 CLR 111
- Cobiac v Liddy (1969) 119 CLR 257
- Hoffenberg v The District Court of New South Wales [2010] NSWCA 142
- Panetta v R [2016] NSWCCA 85
- R v Cartwright (1989) 17 NSWLR 243
- R v Ellis (1986) 6 NSWLR 603
- R v Ingrassia (1997) 41 NSWLR 447
- R v Mauger [2012] NSWCCA 51
- R v Wran [2016] NSWSC 1015