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Court of Criminal Appeal 3 March 2021

Sigalla v R

[2021] NSWCCA 22

Fraud & dishonesty
CRIME APPEALS APPEAL AGAINST CONVICTION CORPORATIONS ACT 2001 (CTH ) S 184(2) VERDICTS OF GUILTY ON ALL TWENTY FOUR COUNTS

Citation: Sigalla v R [2021] NSWCCA 22
Court: NSW Court of Criminal Appeal
Date: 3 March 2021
Judges: Hoeben CJ at CL, Brereton JA, Cavanagh J

Background

The applicant was a director of TZ Limited, an ASX-listed public company whose primary function was raising funds for a technology subsidiary operating in the United States. Between late 2006 and early 2009, he dishonestly used his position as a director to cause funds to be transferred and shares to be issued for his own benefit or for the benefit of his associated companies.

Following a jury trial in the Supreme Court before Adamson J, the applicant was convicted on all 24 counts of dishonestly using his position as a director, contrary to s 184(2)(a) of the Corporations Act 2001 (Cth). The individual sentences totalled 78 years and were partially accumulated to produce a total effective sentence of 10 years, with a non-parole period of six years.

The applicant appealed against both the convictions and the sentences. The conviction appeal raised alleged misdirections on the elements of the offence and the absence of a "claim of right" direction. The sentence appeal raised issues concerning the totality principle, parity with a co-offender, and the sentencing judge's treatment of rehabilitation.

  • Whether the trial judge misdirected the jury by conflating the physical and mental elements of the offence under s 184(2)(a) of the Corporations Act.
  • Whether the trial judge was required to direct the jury that it could not convict unless satisfied beyond reasonable doubt that the applicant did not hold an honest belief he was entitled to the funds.
  • Whether the sentencing judge erred by applying the totality principle as an aggravating factor when fixing individual sentences, rather than as a moderating principle applied to the overall effective sentence.
  • Whether the sentences should have been wholly concurrent given the offending arose from a single course of conduct.
  • Whether the applicant had a justifiable sense of grievance arising from the significantly lesser sentence imposed on his co-offender.
  • Whether the sentencing judge erred in finding that the applicant's lack of remorse and failure to acknowledge wrongdoing entirely precluded any prospects of rehabilitation.

Decision

Conviction appeal dismissed. Brereton JA (Hoeben CJ at CL and Cavanagh J agreeing) held that even if the jury directions were theoretically deficient, they were not practically so in the context of this trial. The central issue at trial was whether the applicant's use of his position was dishonest, not whether a use of his position had occurred at all. Given his only connection to the company was as a director, the inference that the funds flowed as a result of that position was inescapable. The applicant also had ample opportunity to object to the directions at trial but did not, and was not permitted to raise that complaint for the first time on appeal.

On the claim of right direction, the Court held that no such direction was required. A defence based on an honest belief in entitlement to the funds is logically incompatible with an offence that contains a dishonesty element. Directions on that type of argument are unnecessary and, indeed, inappropriate in that context.

Sentence appeal allowed in part. Brereton JA found that the sentencing judge had erred by treating the totality of the criminal conduct as an aggravating factor when setting individual sentences, rather than applying totality as a mitigating principle when fixing the overall effective sentence. However, the Court declined to interfere with the decision not to make the sentences wholly concurrent, noting that a single course of conduct does not require complete concurrency.

On parity, the Court found that the co-offender's lesser sentence was justified by the differences in their respective levels of criminality and subjective circumstances. No justifiable sense of grievance arose. On rehabilitation, Brereton JA held that the sentencing judge erred in treating remorse as a prerequisite to rehabilitation. While absence of remorse may reduce the extent of rehabilitation prospects, it does not eliminate them entirely. The applicant's prior good character, education, and family support indicated at least some prospects of rehabilitation existed.

Cavanagh J agreed with the orders but read the sentencing judge's remarks on totality somewhat differently, viewing them as consistent with the approach approved in Mill v The Queen. Despite this difference in interpretation, Cavanagh J agreed that the overall orders proposed by Brereton JA were appropriate.

Orders Made

  • Time for instituting the appeal extended to the date of filing.
  • Appeal against conviction dismissed.
  • Leave to appeal against sentence granted; appeal allowed.
  • Sentences imposed by Adamson J quashed and replaced with 24 individual terms (ranging from one year to three years and six months), partially accumulated, resulting in:
  • Total effective sentence of nine years and six months, commencing 22 November 2016 and expiring 21 May 2026.
  • Non-parole period of five years and nine months, expiring 21 August 2022.

Key Takeaways

  • A direction that the jury must be satisfied the accused lacked an honest belief in entitlement to funds is not required where the offence already contains a dishonesty element. Such a "claim of right" approach is logically incompatible with a dishonesty-based offence under s 184(2)(a) of the Corporations Act.

  • Under the totality principle, the correct approach is to set appropriate individual sentences first and then apply totality as a moderating, mitigating consideration when arriving at the overall effective sentence. Using totality as an aggravating factor at the individual-sentence stage is an error.

  • A sentence of partially accumulated terms is permissible even where multiple offences arise from a single course of conduct. There is no rule that a course of conduct requires wholly concurrent sentences.

  • Remorse is not a precondition to a finding of rehabilitation prospects. Absence of remorse may reduce the weight given to rehabilitation as a sentencing factor, but the sentencing court must still consider all available indicators of rehabilitation, including prior good character, education, and support networks.

  • A co-offender's lesser sentence will not give rise to a justifiable sense of grievance where the disparity is explicable by genuine differences in criminality or subjective circumstances between the two offenders.

Legislation and Cases Referenced

Legislation:
- Corporations Act 2001 (Cth), ss 9, 184(2)(a), 206B, 206BA
- Criminal Code (Cth), ss 2.2, 9.1, 9.5
- Crimes Act 1914 (Cth), ss 16A(2), 16B
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 21A(2)(m)
- Criminal Appeal Rules 1952 (NSW), rr 3B, 4

Key Cases:
- MacLeod v The Queen (2003) 214 CLR 230; [2003] HCA 24
- Johnson v The Queen (2004) 78 ALJR 616; [2004] HCA 15
- Mill v The Queen (1988) 166 CLR 59; [1988] HCA 70
- Pearce v The Queen (1998) 194 CLR 610; [1998] HCA 57
- Postiglione v The Queen (1997) 189 CLR 295; [1997] HCA 26
- Green v The Queen (2011) 244 CLR 462; [2011] HCA 49
- Lowe v The Queen (1984) 154 CLR 606; [1984] HCA 46
- House v The King (1936) 55 CLR 499; [1936] HCA 40
- Channon v R [2020] NSWCCA 112
- BP v R (2010) 201 A Crim R 379; [2010] NSWCCA 159
- MLP v R [2014] NSWCCA 183
- ARS v R [2011] NSWCCA 266
- Kwok v R (2007) 175 A Crim R 278; [2007] NSWCCA 281
- Director of Public Prosecutions (Cth) v Beattie (2017) 270 A Crim R 556; [2017] NSWCCA 301