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District Court 9 April 2020

R v Hughes

[2020] NSWDC 98

Fraud & dishonesty
ATTEMPT SAME OFFENCE

Citation: R v Hughes [2020] NSWDC 98
Court: District Court of New South Wales
Date: 9 April 2020
Judge(s): Mahony SC DCJ

Background

The offender pleaded guilty to two Commonwealth offences: attempting to dishonestly obtain a financial advantage from the Commonwealth by lodging a false Business Activity Statement (BAS) in his half-brother's name (Count 1), and actually obtaining $26,611.00 by lodging six false BASs through a company he incorporated and controlled (Count 2). Two further related attempts were taken into account on a schedule under s 16BA of the Crimes Act 1914 (Cth). All offending occurred while the offender was on parole for seven similar Commonwealth tax fraud offences, for which he had been sentenced in 2010 to four years and six months imprisonment.

The offending began just four months after the offender's release on parole in May 2013. For Count 1, he stole his half-brother's identity, opened bank accounts in his name, registered him as a sole trader, and impersonated him in calls with the ATO. For Count 2, he incorporated a company, falsely represented it as a mechanical repairs business, and lodged a series of false BASs over ten months, ultimately extracting refunds of GST and Fuel Tax Credits that he spent on personal expenses.

At the sentence hearing in March 2020, the offender was 47 years old and had been in remand custody since 11 November 2019. Sentencing raised complex issues around the structure of federal sentences, revocation of parole, totality, and the emerging question of the relevance of Covid-19 to sentencing.

Legal Issues

  • What was the appropriate objective seriousness of each count and the scheduled items?
  • What weight should be given to the offender's late guilty plea, subjective circumstances, psychiatric history, and prospects of rehabilitation?
  • Whether the offender's medical conditions (diabetes mellitus and hypertension) warranted mitigation of sentence?
  • Whether the Covid-19 pandemic was a relevant mitigating factor in sentencing, particularly for an offender with chronic illness?
  • How should the sentences for Counts 1 and 2 be structured in relation to each other and to the balance of parole that became payable upon revocation of the federal parole order?
  • Whether special circumstances existed to vary the statutory non-parole period ratio under Commonwealth sentencing provisions?

Decision

Objective Seriousness

Count 1 (the attempted fraud in the half-brother's name) fell within the upper part of the low range of objective seriousness, aggravated by the identity theft of a vulnerable family member and by the fact that it occurred within four months of the offender's release on parole (at [112]). Count 2 was assessed as falling within the mid-range but towards the bottom of that range, given the incorporation of a company as a fraud vehicle and the sustained lodgement of false BASs over ten months (at [114]). The scheduled items fell within the lower range but towards the top of that range, and required some accumulation on the sentence for Count 2 (at [116]).

Subjective Circumstances and Plea

The court accepted that childhood trauma following his father's death, and physical assault by an older brother over four years, likely adversely affected the offender's personality development, and that depressive and anxiety symptoms probably contributed to impaired judgment at the time of the offences (at [126]). A 10% utilitarian discount was allowed for the late guilty plea, entered on the first day of a scheduled three-week trial, as it provided a real practical benefit by avoiding a lengthy hearing (at [130]). However, the court did not accept that the offender had demonstrated genuine contrition, remorse, or acceptance of responsibility, noting his ongoing tendency to minimise conduct and blame others, and found his rehabilitation prospects to be guarded (at [127]-[130]).

Medical Conditions and Covid-19

The offender's diabetes mellitus and hypertension were not treated as mitigating factors. There was no medical evidence of their extent, and no evidence they had affected him during his previous custodial sentence (at [131]). On Covid-19, the court acknowledged that the pandemic was causing additional stress for prisoners and their families, and accepted in principle that it may be a relevant sentencing consideration. However, it was not satisfied on the balance of probabilities that incarceration would place this offender at any greater risk than a member of the general public, and declined to give the pandemic significant weight in sentencing (at [133]-[136]).

Sentence Structure and Parole

Because the offending occurred while the offender was subject to a federal parole order, that order was deemed revoked and a warrant of detention was required under s 19AS of the Crimes Act 1914 (Cth) (at [139]). The court accepted that the offender was entitled to a reduction for "clean street time" of three months and thirty days between his release and his first offence, leaving a balance of parole of one year, two months and one day to be served from 9 April 2020 (at [138]-[141]). The sentences for the two counts were structured to be partly concurrent with each other and with the balance of parole, producing a total effective sentence of three years and eight months (at [142]-[143]). A single non-parole period of two years and six months was fixed under s 19AR(2)(d), and a period of 151 days of pre-sentence custody was deducted from both the head sentence and the non-parole period (at [143]-[144]).

Orders Made

  • A warrant of detention was issued under s 19AS of the Crimes Act 1914 (Cth): the offender was required to serve the balance of parole of 1 year, 2 months and 1 day from 9 April 2020.
  • Count 2: 2 years and 6 months imprisonment, commencing 9 December 2020 and expiring 8 June 2023.
  • Count 1: 18 months imprisonment, commencing 9 June 2022 and expiring 8 December 2023.
  • Total effective sentence (including balance of parole): 3 years and 8 months.
  • Single non-parole period of 2 years and 6 months fixed under s 19AR(2)(d).
  • 151 days pre-sentence custody deducted from both head sentence and non-parole period: non-parole period to expire 10 May 2022; head sentence to expire 10 July 2023.
  • Reparation order of $26,611.00 payable to the Commonwealth of Australia in favour of the Commissioner of Taxation.

Key Takeaways

  • A 10% utilitarian discount for a late guilty plea is available even where the plea is entered on the first day of trial, but the discount does not carry with it any inference of genuine contrition where the offender's conduct and attitudes demonstrate otherwise (at [130]).

  • Committing Commonwealth tax fraud by an almost identical method to prior offences, and within months of release on parole for those very offences, significantly increases the weight to be given to specific deterrence, denunciation, and retribution under s 16A of the Crimes Act 1914 (Cth), and disentitles the offender to leniency on account of criminal history (at [118]-[120]).

  • Where a federal parole order is revoked due to fresh offending, the sentencing court must issue a warrant of detention under s 19AS of the Crimes Act 1914 (Cth) and calculate the balance of parole by deducting "clean street time" between release and the first offending act (at [138]-[139]).

  • The District Court held, consistent with early Victorian authority in Brown (aka Davis) v The Queen [2020] VSCA 60, that no general sentencing principle had yet emerged regarding Covid-19, and that the pandemic could not reduce a sentence without evidence that the specific offender faced materially greater risk in custody than the general public (at [134]-[136]).

  • Accepted psychiatric evidence of childhood trauma and mood symptoms contributing to impaired judgment can be taken into account in sentencing, even where those symptoms did not reach the threshold of a diagnosable psychiatric condition at the time of the offences (at [126]).

Legislation and Cases Referenced

Legislation
- Bail Act 2013 Crimes Act 1914 (Cth) Crimes (Administration of Sentences) Act 1999 Crimes (Sentencing Procedure) Act 1999 Criminal Code (Cth) 1995

Cases
- Brown (aka Davis) v The Queen [2020] VSCA 60 Cahyadi v The Queen (2007) 168 A Crim R 41 Callaghan v R [2006] NSWCCA 58 Hughes v R [2011] NSWCCA 226 Pearce v the Queen (1998) 194 CLR 610 Rakielbakhour v DPP [2020] NSWSC 323 R v Achurch (2011) 216 A Crim R 152 R v Carradonna (2000) 118 A Crim R 312 R v Todd (1982) 2 NSWLR 517 Veen v The Queen (No 2) (1988) 164 CLR 466 Xiao v R [2018] NSWCCA 4 Zreika v R [2012] NSWCCA 44