Citation: R v Kelu; R v Millner (No 8) [2023] NSWSC 1544
Court: Supreme Court of NSW
Date: 23 November 2023
Judge: Cavanagh J
Background
Two offenders, Mr Kelu and Mr Millner, had been convicted of Commonwealth tax fraud offences involving two gold trading schemes. The schemes resulted in a loss to the Commonwealth of approximately $40 million. The matter had been listed for sentence, with a prior sentencing hearing having taken place on 6 October 2023.
On the day listed for sentencing, two procedural complications arose. Mr Kelu sought an adjournment to obtain further evidence about the disposition of the fraud proceeds and his personal benefit. Mr Millner applied for an adjournment to adduce further evidence relevant to contrition, arising from unresolved correspondence with the Australian Federal Police (AFP) about proceeds of crime recovery proceedings.
A third issue arose when the Crown made a fresh detention application in respect of Mr Kelu, following his withdrawal of instructions from his legal representatives and his own representations to the court. Mr Kelu had previously been on bail after the court found special or exceptional circumstances existed at an earlier detention hearing in July 2023.
Legal Issues
- Whether Mr Kelu's proposed further evidence about the proceeds of the fraud and his personal benefit was relevant to any sentencing factor, justifying an adjournment.
- Whether Mr Millner should be permitted to adduce further evidence of contrition, in connection with ongoing proceedings under the Proceeds of Crime Act 2002 (Cth), despite the relevant AFP correspondence having been overlooked for several months.
- Whether special or exceptional circumstances existed under s 22B of the Bail Act 2013 (NSW) to justify Mr Kelu remaining on bail after conviction, in the face of a Crown detention application.
Decision
Adjournment for Mr Kelu's further evidence
The Crown clarified that the approximately $24 million shortfall in recovery (relative to the $40 million Commonwealth loss) was not an aggravating factor; the Crown's position was that the relevant sentencing factor was the total loss, not what was or was not recovered. The Crown also accepted there was no evidence that either offender had secreted money away or funded a lavish lifestyle. Against that backdrop, much of Mr Kelu's proposed further evidence became of limited relevance. Mr Kelu ultimately withdrew his legal representatives' instructions and presented a bundle of documents personally. The court accepted the tender of those documents and afforded the Crown time to respond in writing.
Adjournment for Mr Millner's contrition evidence
Cavanagh J accepted that contrition is a significant sentencing factor and that Mr Millner's proposed engagement with the AFP in the proceeds of crime proceedings was capable of bearing on that issue. Although the AFP had written to Mr Millner's solicitors in August 2023, the correspondence had been inadvertently overlooked for months. The judge accepted counsel's explanation and allowed Mr Millner the opportunity to put on further evidence before the adjourned sentencing date.
Detention application for Mr Kelu
Under s 22B(1)(b) of the Bail Act 2013, where a detention application is made after conviction, the court must refuse bail unless the convicted person establishes special or exceptional circumstances on the balance of probabilities. At the July 2023 hearing, Cavanagh J had refused the detention application because Mr Kelu faced imminent medical testing that Justice Health could not accommodate. That circumstance no longer existed. Mr Kelu also argued he had strong prospects of appeal, asserting the gold trading arrangements were genuine rather than shams. The judge found that an unsubstantiated assertion of strong appeal prospects does not constitute special or exceptional circumstances, noting that such a construction would defeat the purpose of s 22B. Accordingly, the detention application was granted and Mr Kelu was taken into custody immediately.
Orders Made
- Sentencing proceedings adjourned to 10.00 am on 15 December 2023.
- Short further sentencing hearing fixed for 9.30 am on 7 December 2023 (estimated one hour).
- Crown's detention application in respect of Mr Kelu granted; Mr Kelu directed to be taken into custody immediately.
Key Takeaways
- Under s 22B(1)(b) of the Bail Act 2013 (NSW), the onus falls on the convicted person to establish special or exceptional circumstances on the balance of probabilities; the court must refuse bail if that onus is not discharged.
- An unsubstantiated assertion of strong appeal prospects does not, without more, constitute special or exceptional circumstances for the purposes of s 22B. Accepting that proposition would undermine the provision's purpose.
- Special or exceptional circumstances are fact-specific and time-sensitive: circumstances found to justify bail at one hearing may no longer exist at a later hearing, as was the case here once Mr Kelu's immediate medical concerns had passed.
- Contrition remains a significant sentencing factor, and a court may grant an adjournment to allow a convicted person to put on further evidence bearing on that factor, even where the delay arose from the oversight of correspondence by legal representatives.
- Where the Crown does not seek an adverse finding, and cannot prove a matter beyond reasonable doubt, proposed evidence directed solely at that matter carries reduced weight as a basis for an adjournment.
Legislation and Cases Referenced
Legislation
- A New Tax System (Goods and Services Tax) Act 1999 (Cth)
- Bail Act 2013 (NSW), ss 22B, 32(1)
- Proceeds of Crime Act 2002 (Cth), s 320
Cases
- Director of Public Prosecutions (NSW) v Day [2022] NSWCCA 173
- Director of Public Prosecutions (NSW) v Van Gestel (2022) 109 NSWLR 136; [2022] NSWCCA 171