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Court of Criminal Appeal 1 November 2004

Regina v Yeung LO Regina v Hui OUYANG [2004] NSWCCA 382 revised - 5

[2004] NSWCCA 382

Fraud & dishonesty
SENTENCING RESPONDENTS HUSBAND AND WIFE TWO INFANT CHILDREN NO RELATIVES IN AUSTRALIA HARDSHIP ON CHILDREN JUSTIFIED ORDER OUTWEIGHED NEED FOR DETERRENCE. D

Citation: Regina v Yeung LO; Regina v Hui OUYANG [2004] NSWCCA 382
Court: NSW Court of Criminal Appeal (on appeal from the District Court)
Date: 1 November 2004
Judge(s): Giles JA; Buddin J; Smart AJ

Background

The two respondents, a husband and wife, were directors and senior officers of a company that imported automotive windscreens. Over two periods between 1998 and 2000, the company imported thirty shipments of windscreens from a Chinese supplier. While the company paid the correct invoiced amounts to that supplier, the respondents obtained false invoices for use in customs declarations. Those false invoices were passed to freight forwarders and customs brokers, who relied on them when lodging declarations with the Australian Customs Service. The result was an underpayment of customs duty and GST totalling approximately $263,692.

The husband pleaded guilty to two counts of defrauding the Commonwealth. The wife pleaded guilty to two counts of being knowingly concerned in that fraud. The District Court sentenced each of them to twelve months' imprisonment on each count, with the sentences structured to run consecutively for an effective term of eighteen months. Crucially, Goldring DCJ ordered that both sentences be served by way of home detention rather than full-time custody. Each respondent was also fined $30,000 per offence.

The Crown appealed to the Court of Criminal Appeal, arguing that the sentences were manifestly inadequate, specifically because the home detention orders should not have been made.

  • Whether the sentencing judge erred by treating the hardship that full-time imprisonment would cause to the respondents' infant children as exceptional circumstances justifying home detention orders.
  • Whether the sentences were manifestly inadequate because they did not include a period of full-time custody.
  • Whether the sentencing judge erroneously treated the substantial fines as a substitute for, or as justifying leniency in, the custodial component of the sentence.

Decision

The Court of Criminal Appeal unanimously dismissed the Crown's appeal. Giles JA, with whom Buddin J and Smart AJ agreed, held that no error had been established sufficient to make out manifest inadequacy.

The Court emphasised that sentencing for home detention involves a two-stage process. At the first stage, the sentencing judge determines the appropriate term of imprisonment without regard to the possibility of a home detention order. At the second stage, the judge exercises a separate discretion about whether a home detention order should be made. In this case, Goldring DCJ correctly followed both stages, and the terms of imprisonment imposed were within the available range under the relevant legislation.

On the question of the fines, the Court found that the sentencing judge's remarks about the role of substantial fines in economic offences were unexceptional and correct. His Honour did not treat the fines as compensating for any leniency in the home detention order, partly because the suitability assessment for home detention had not yet been completed when those remarks were made.

On the central question of general deterrence, the Court accepted that the sentencing judge was fully aware of its importance. However, deterrence considerations at the home detention stage had to be weighed against countervailing factors. The judge found that the hardship which full-time custody of both parents simultaneously would inflict on their two infant children, who had no relatives in Australia, was sufficient to outweigh the seriousness of the offences and the need for general deterrence. The Court of Criminal Appeal found no error in that conclusion.

Orders Made

  • Appeal dismissed.

Key Takeaways

  • The Court of Criminal Appeal confirmed that home detention sentencing involves a distinct two-stage process: first, fixing the appropriate term of imprisonment; second, exercising the separate discretion to order home detention.
  • In dismissing the appeal, the Court accepted that general deterrence considerations, while important in customs fraud cases, are not absolute and can be outweighed by the particular hardship that full-time imprisonment of both parents would cause to their young children.
  • The finding turned significantly on the fact that both parents faced simultaneous imprisonment and that their children had no other relatives in Australia, making the hardship to the children acute.
  • No error was established in the sentencing judge's approach to fines. Observations that substantial fines serve deterrent purposes in economic offences were treated as correct and uncontroversial, provided they are not used to justify leniency in the custodial component.
  • Under s 7(1) of the Crimes (Sentencing Procedure) Act 1999, a court may only direct that a sentence be served by home detention where the term of imprisonment imposed does not exceed eighteen months and the offender has been assessed as suitable.

Legislation and Cases Referenced

Legislation:
- Crimes Act 1914 (Cth), ss 5, 29D
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 7(1), Pt 6
- Home Detention Act 1996 (NSW)

Cases:
- R v Cappadona (2001) 122 A Crim R 52
- R v Caradonna (2000) 118 A Crim R 312
- R v Day (1998) 100 A Crim R 275
- R v Edwards (1996) 90 A Crim R 510
- R v Girard [2004] NSWCCA 170
- R v Jurisic (1988) 45 NSWLR 209
- R v Maslen (1995) 79 A Crim R 119
- R v Purdon (NSWCCA, 27 March 1997, unreported)
- R v Tiki (NSWCCA, 24 August 1994, unreported)
- R v Wright (1994) 74 A Crim R 152