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Court of Criminal Appeal 9 August 2024

Merheb v R

[2024] NSWCCA 145

Fraud & dishonesty
CRIME APPEALS APPEAL AGAINST SENTENCE MISAPPLICATION OF PRINCIPLE APPEALS APPEAL AGAINST SENTENCE

Citation: Merheb v R [2024] NSWCCA 145
Court: NSW Court of Criminal Appeal
Date: 9 August 2024
Judges: Mitchelmore JA, Davies J, Ierace J

Background

The applicant pleaded guilty in the Local Court to three Commonwealth offences: obtaining a financial advantage by deception, dealing with property reasonably suspected of being proceeds of crime, and dealing in identification information. The offending involved impersonating real individuals to fraudulently claim disaster relief and pandemic payments, with 45 payments totalling $43,800 made into bank accounts under the applicant's control. A further 123 deposits totalling approximately $126,942 were paid into his accounts under Customer Reference Numbers linked to 73 individuals.

The applicant was sentenced to an aggregate term of 3 years and 6 months imprisonment, with a non-parole period of 1 year and 10 months. Indicative sentences reflected a 40% discount, including 25% for guilty pleas.

The applicant sought leave to appeal on two grounds: first, that the sentencing judge breached the principle in The Queen v De Simoni when addressing the proceeds of crime count; and second, that the judge introduced material not in evidence and denied the applicant an opportunity to make submissions on it, giving rise to procedural unfairness.

  • Whether the sentencing judge breached the De Simoni principle by inferring that money dealt with was the proceeds of a fraud-related crime, thereby effectively sentencing for a more serious offence than the one charged.
  • Whether the sentencing judge denied the applicant procedural fairness by relying on a characterisation of a video gaming convention as a form of gambling, without that matter being in evidence or the subject of submissions.

Decision

Ground 1: De Simoni Principle

The De Simoni principle prohibits a sentencing judge from taking into account, as an aggravating factor, circumstances that would have constituted a more serious offence. The count of dealing with property reasonably suspected of being proceeds of crime under s 400.9(1) of the Criminal Code (Cth) carries absolute liability as to the mental element, meaning no fault element need be proved. A more serious variant of the offence exists where the accused knows, is reckless, or is negligent as to the property being proceeds of crime.

The Court found that, read as a whole, the sentencing remarks did not disclose any inference that the applicant was reckless or negligent in a way that would have amounted to a more serious offence. The judge correctly identified the maximum penalty applicable to s 400.9(1) and acknowledged that absolute liability applied. The remark that it was reasonable to infer the money was proceeds of a fraud-related crime reflected a submission made by the applicant's own counsel, and nothing in the remarks suggested the judge was treating aggravated mental fault as an aggravating feature. Ground 1 was rejected.

Ground 2: Procedural Fairness

The applicant's letter to the sentencing court mentioned his attendance at a video gaming convention. The judge characterised this as involving a form of gambling, a characterisation the applicant contended was unsupported by evidence and made without affording him an opportunity to respond. Davies J accepted that the remark was "unfortunate and should not have been made."

However, the Court held that no practical injustice flowed from the remark. The sentencing judge's qualified assessment of the applicant's prospects of reoffending rested on two independent foundations: his failure to take any steps to address his gambling addiction between arrest and sentence, and his commission of the index offences while on conditional liberty. The gaming convention remark played no discernible role in reaching that assessment, and its inclusion was not material to the outcome. Ground 2 was also rejected.

Orders Made

  • Leave to appeal granted.
  • Appeal dismissed.

Key Takeaways

  • The Court of Criminal Appeal confirmed that the De Simoni principle is not breached merely because a sentencing judge infers a factual connection between property and crime; the principle is engaged only where the judge treats circumstances amounting to a more serious offence as an aggravating factor.
  • Where absolute liability applies to the mental element of an offence, a sentencing judge's reference to the nature of the underlying conduct does not automatically import fault elements belonging to a higher-grade version of the offence.
  • A procedural fairness complaint about an extraneous remark will not succeed if the impugned material was not material to the sentencing outcome; the test is whether practical injustice resulted, not merely whether an error was made.
  • No denial of procedural fairness was established where the applicant's failure to address his gambling addiction, and his offending while on conditional liberty, independently grounded the sentencing judge's qualified assessment of reoffending prospects.
  • In dismissing the appeal, the Court applied the principle from Smith v R [2024] NSWCCA 59 that an erroneous remark does not vitiate a sentence if it is shown not to have affected the outcome.

Legislation and Cases Referenced

Legislation:
- Criminal Code Act 1995 (Cth), ss 5.5, 134.2, 371.1, 400.4, 400.9, 372.1
- Evidence Act 1995 (NSW), s 144

Cases:
- The Queen v De Simoni (1981) 147 CLR 383; [1981] HCA 31
- Smith v R [2024] NSWCCA 59; (2024) 93 MVR 345
- Weir v R [2011] NSWCCA 123
- House v The King (1936) 55 CLR 499; [1936] HCA 40