1 BASTEN JA: I agree with Hidden J that there should be a grant of leave to appeal and that the appeal should be dismissed. I also agree with his Honour’s reasons. However, I would seek to add some further comments with respect to the argument raised by counsel for the applicant with respect to the ratio of the effective non-parole period to the overall sentence.

2 The argument for the applicant relied on an assumption that the “practice” in relation to federal offenders of specifying a period of 60-66% of the head sentence as the usual non-parole period should be adopted. Indeed, as Hidden J has noted, this Court in Cahyadi v Regina [2007] NSWCCA 1, (2007) 168 A Crim R 41 at [36]- [40] (Howie J, Adams and Price JJ agreeing) expressed the view that it would be “unfair” to adopt the “more severe State regime” under s 44 of the Crimes (Sentencing Procedure) Act 1999 (NSW). In that case, the principal offences were contraventions of Commonwealth law and the offences against State law were described as “only incidental” at [38]. His Honour stated:

It seems to me in such a situation to be unfair to sentence by complying with the more severe State regime under s 44, where the statutory ratio is 75 percent, rather than by adopting the practice for determining the non-parole for Commonwealth offences, where the ratio is 60 to 66 percent.

However, at [40] Howie J expressed the qualification that the ratio adopted in relation to Commonwealth offences will not always be appropriate.

3 There are two aspects of this approach which are troubling. The first concerns the justification for the ratio adopted as a matter of practice in relation to federal offences. It is at least possible that part of the justification derived from a time when the overall sentence was subject to remission, but the non-parole period was not. During the period of operation of s 16G of the Crimes Act 1914 (Cth), which was repealed from 16 January 2003, the practice in this State was to reduce a sentence by approximately one-third to take account of the fact that prisoners were not entitled to remissions: see Shore (1992) 66 A Crim R 37 and Director of Public Prosecutions v El Karhani (1990) 21 NSWLR 370. However, in jurisdictions where the sentence is subject to remissions, allowance for that fact will need to be made in fixing a non-parole period: see s 19AF.

4 The second concern, is the idea that the operation of the statutory formula under State law may depend upon questions of “fairness” or a judgment as to whether Commonwealth or State offences predominate in a particular case. In sentencing for Commonwealth offences, the Court is exercising federal jurisdiction pursuant to s 68(2) of the Judiciary Act 1903 (Cth). In Williams v The King [No. 2] [1934] HCA 19; (1934) 50 CLR 551 at 560, Dixon CJ noted of a particular construction of s 68:

This accords with the general policy disclosed by the enactment, namely, to place the administration of the criminal law of the Commonwealth in each State upon the same footing as that of the State and to avoid the establishment of two independent systems of criminal justice. It is, in my opinion, no objection to the validity of such a provision that the State law adopted varies in the different States.

5 This position continues since the enactment of Part 1B of the Crimes Act 1914 in 1990. Immediately following the passage just quoted, Dixon J continued:

The word ‘conviction’ is capable of including sentence, and a construction which confines the description to appeals from verdict and incidental proceedings, and excludes appeals from sentence appears to me inconsistent with the evident purpose of the Legislature of giving to prisoners, at any rate, the same remedies by way of appeal in the case of Federal offences as exist in the case of State offences.

6 As noted by Gleeson CJ in Putland v The Queen [2004] HCA 8; (2004) 218 CLR 174 at [4], the laws of a State providing for the procedure for trial and conviction on indictment will pick up the laws of a State with respect to sentencing. However, the State laws picked up by s 68(1) will only apply in relation to a federal offence “so far as they are applicable”. There are, in effect, two kinds of constraint on their application. One is that a State law will be inapplicable if the application “would have involved severing and ‘picking up’ part, but not the whole, of an integrated legislative scheme and giving an altered meaning to that severed part of the State legislation”: Putland, at [37] (Gummow and Heydon JJ). The other situation will be where a Commonwealth law, to use the language of s 79 of the Judiciary Act, otherwise provides: Putland, at [41].

7 Although Part 1B of the Crimes Act 1914 deals extensively with sentencing practices and principles, it is by no means an exclusive code and it has been accepted that general law principles will continue to operate: see, eg, Johnson v The Queen [2004] HCA 15; (2004) 78 ALJR 616 at [15]; Putland at [12] (Gleeson CJ), and [52] (Gummow and Heydon JJ, Callinan J agreeing). On the other hand, at [52] in Putland, Gummow and Heydon JJ accepted that Part 1B did make “exhaustive provision” on some subjects, an example being the “separate regime for fixing federal non-parole periods” to be found in Part 1B, Div 4, relying on a statement to that effect in the Explanatory Memorandum to the Crimes Legislation Amendment Act (No. 2) 1989 (Cth), which introduced Part 1B. Nevertheless, there may be a question as to how far that statement should be taken. Although the provisions in Div 4 may be seen as an exhaustive statement of the power to fix a non-parole period or a recognizance release order, in the identified circumstances, there is no attempt to set out the criteria which the Court should take into account, nor to identify the relationship between the non-parole period and sentence. Thus, the “practice” of fixing a non-parole period of between 60 and 66% of the sentence, appears to derive from the application of general law principles. Nevertheless, one particular provision of Div 4 should be noted, namely s 19AJ, which provides as follows:

19AJ Court may only fix non-parole periods or make recognizance release orders for federal sentences of imprisonment

This Division does not authorise a court to fix a single non-parole period, or make a recognizance release order, in respect both of federal sentences of imprisonment and State or Territory sentences of imprisonment.

8 That provision must be read in the context of s 19AB which requires that a court, in sentencing for one or more federal offences must, if it does not make a recognizance release order, “fix a single non-parole period in respect of that sentence or those sentences”: s 19AB(1)(d). As the sentencing in the present case illustrates, the existence of separate regimes for State and federal offences can give rise to potential anomalies where sentences in each category are partly concurrent and partly cumulative and where allowance must be made for the principle of totality, in considering the overall effect of the sentences imposed. (See also s 16E of the Crimes Act 1914.)

9 The applicant’s contention should be rejected for three reasons. First, even if the Commonwealth offences predominated, it does not follow that an appropriate non-parole period should fall within the range of 60-66% of the total sentence period. Accepting the premise as to the usual practice, the conclusion does not follow. As explained by Meagher JA (Wood CJ at CL and Studdert J agreeing) in R v Viana [2001] NSWCCA 171 at [3], and as reiterated in Bick v Regina [2006] NSWCCA 408 at [14] (Price J, Hodgson JA and Howie J agreeing) the usual course does not mean that higher percentages cannot stand. Nor did a higher percentage attract adverse comments in The Queen v Alimic [2006] VSCA 273 (Warren CJ, Nettle and Redlich JJA). Indeed, accepting that the statutory prescription contained in State law does not operate in relation to federal offences, the fact that similar offences under State law might attract a higher ratio of minimum term to sentence is not an irrelevant consideration, given that the Commonwealth regime has adopted a principle of uniformity within the States and Territories, rather than national uniformity: see The Queen v Gee (2003) 212 CLR 230 at [7] (Gleeson CJ), noted by Gummow and Heydon JJ in Putland at [60]).

10 Secondly, the departure from the assumed range for Commonwealth offences and the statutory prescription in relation to State offences occurred because of the dual pressures of the need for a degree of accumulation of sentences and the need to avoid an oppressive total custodial penalty. In order to maintain a custodial penalty sufficient to reflect the seriousness of the conduct an otherwise appropriate ratio may need to be adjusted.

11 Thirdly, as explained by Hidden J, neither the individual sentences, nor the total effect of the sentencing process, resulted in a manifestly excessive sentence. Hidden J has noted a number of reasons why that cannot be accepted. I would only emphasise that the offences committed whilst the applicant was senior assistant official receiver demonstrate a serious breach of trust over an extended period of time. The importance of general deterrence in respect of such conduct by public officers has been explained on many occasions: see, eg, Broadhurst (1988) 25 A Crim R 349 at 353 (Lee J) approved in Delcaro (1989) 41 A Crim R 33 at 36 (Campbell J, Gleeson CJ and Carruthers J agreeing).

12 GROVE J: I agree with Hidden J.

13 HIDDEN J: The applicant, Michael Simon Studman, pleaded guilty in the District Court to an indictment containing eighteen counts of a fraudulent nature, most of them under the Commonwealth Crimes Act but some under the New South Wales Crimes Act. The first eleven counts were of fraudulently misappropriating Commonwealth property, an offence under s71(1) of the Crimes Act (C’th) which carried a maximum sentence of imprisonment for seven years. Counts twelve and thirteen were of defrauding a Commonwealth public authority, an offence under s29D of the Crimes Act (C’th) which carried a maximum sentence of imprisonment for ten years. (Both those provisions have since been repealed).

14 The remaining five counts were brought under the New South Wales Crimes Act. Counts fourteen and fifteen were of obtaining money by deception, an offence under s178BA of the Act which carries a maximum sentence of imprisonment for five years. Counts sixteen, seventeen and eighteen were of fraudulent misappropriation, an offence under s178A of the Act which carries a maximum sentence of imprisonment for seven years.

15 The applicant was sentenced as follows:

· On counts five, seven and ten (s71 of the Commonwealth Act), concurrent sentences of imprisonment for seven months, dating from 26 August 2005;

· On counts one to four, six, eight, nine and eleven (also under s71), concurrent sentences of imprisonment for twenty-two months, dating from 26 February 2006;

· On counts twelve and thirteen (s29D of the Commonwealth Act), concurrent sentences of imprisonment for twenty-seven months, dating from 26 November 2007;

These sentences resulted in an overall head sentence of four-and-a-half years, in respect of which his Honour fixed a non-parole period of two years and nine months.

· On counts fourteen, fifteen and sixteen (ss178BA and 178A of the New South Wales Act), concurrent sentences of imprisonment for eleven months, dating from 26 February 2008, with a non-parole period of six months;

· On counts seventeen and eighteen (also s178A), concurrent sentences of imprisonment for eleven months, dating from 26 August 2008, again with a non-parole period of six months.

16 The sentences for the State offences amounted to an overall sentence of imprisonment for seventeen months with a non-parole period of twelve months. The aggregate of all the sentences was an overall sentence of four-and-a-half years with a non-parole period of three-and-a-half years. The applicant seeks leave to appeal against those sentences.

Facts

17 The facts have been helpfully summarised in the Crown’s written submissions. Put shortly, over a period between 1996 and 2003 the applicant used his position as a senior officer of the Insolvency and Trustee Service (ITSA), and later his position as a senior employee of a firm called Simms Partners (a partner of which was a registered trustee in bankruptcy), to misappropriate a little over $514,000 from a number of bankrupt estates administered by ITSA and by the partner of the firm. The Commonwealth offences related to his conduct while at ITSA, and the State offences were committed while he was employed at Simms Partners.

18 Counts twelve and thirteen, the two offences of defrauding a Commonwealth public authority, were committed with an accomplice, who has since died. Of the total amount defrauded, the accomplice obtained an amount just under $132,400, and the applicant obtained the balance.

19 The Commonwealth offences were committed between 1999 and 2001, when the applicant was the Senior Assistant Official Receiver at ITSA, exercising powers delegated to him by the Official Trustee relating to the administration of bankrupt estates.

20 Counts two to eight and eleven arose from the applicant’s lodgement and approval of false and fictitious proofs of debt in various bankruptcies. Dividends relating to those debts were then paid out of the bankrupt estates into bank accounts operated by the applicant in false names. Count eleven related to his fraudulently authorising the payment of a refund from a bankrupt estate to a bank account which he controlled. He used false identities and fictitious business entities, together with related false addresses and bank accounts, to facilitate the commission of the offences and to evade detection. The total amount involved in these offences was roughly $120,300.

21 Count one involved a more complex fraud on his part. In his official capacity he contrived a settlement with a bankrupt, as a result of which the bankrupt paid $15,000 to the Official Receiver. The cheque sent by the bankrupt to ITSA was falsely recorded as a payment relating to the composition of a different bankruptcy. The applicant fabricated documents relating to this composition and its rejection, which resulted in the $15,000 being refunded to a false identity used by him.

22 Count nine arose from the use of his position to fraudulently alter cheques endorsed as payable to ITSA, and misappropriate their proceeds in amounts totalling roughly $18,300. All the counts referred to so far were offences of fraudulently misappropriating Commonwealth property (s71 of the Commonwealth Act).

23 Counts twelve and thirteen, offences of defrauding a Commonwealth public authority under s29D of the Act, related to fraudulent claims the applicant made, in the course of his employment at ITSA, upon the Stevedoring Industry Reform Small Business Compensation Fund. The claims were for losses purportedly suffered by fictitious entities as a result of the waterfront dispute between Patricks Stevedores and the Maritime Union of Australia in the late 1990s. He created fictitious entities, forged documents, and used bank accounts and post office boxes in false names. The total amount defrauded, which he shared with his accomplice, was a little over $264,600.

24 As I have said, the remaining five counts were offences under the State Act. They were committed between 2002 and 2003, while the applicant’s position at Simms Partners involved his assisting the partner who was the registered trustee in bankruptcy. Broadly speaking, his conduct was similar to that in which he engaged at ITSA.

25 Counts fourteen and fifteen, offences of obtaining money by deception under s178BA of the Act, involved his approving fictitious proofs of debt payable to fictitious entities controlled by him. The amounts involved totalled a little under $27,500. Counts sixteen to eighteen, charges of fraudulent misappropriation under s178A of the Act, arose from his issuing cheques payable to ITSA for realisation charges in relation to various bankrupt estates. He fraudulently altered those cheques and paid them into a bank account which he operated. The amounts misappropriated totalled roughly $50,400.

Subjective case

26 The applicant was forty-nine years old at the time of sentence, and is now fifty-one. He has a minor criminal history, of no present significance.

27 There was evidence that at the time of the offences he suffered a severe gambling addiction, which the sentencing judge found to have been the motivation for his criminal activity. In the light of psychological evidence, his Honour accepted this condition as a recognised mental health problem, and found that it impeded the applicant’s capacity for self control and balanced judgment. It seems that his gambling engendered a cycle of anxiety, guilt and depression, from which he sought relief by further gambling. His Honour saw it as having “hurtled” him into a “calamitous predicament”.

28 The applicant indicated early an intention to plead guilty to the charges and co-operated with investigating authorities. His Honour found him to be deeply contrite. At the time he stood for sentence he had sought treatment for his addiction, and his Honour assessed his prospects of rehabilitation as “positive and strongly so”. Notwithstanding the serious effects of his conduct upon his financial position and his employment opportunities, his partner remained supportive of him. The psychologist who provided a report expressed the view that he would require “extensive and prolonged treatment.”

The application

29 The submissions of Mr Odgers SC, for the applicant, were directed primarily to the effective non-parole period and its proportionate relationship to the overall sentence. However, argument was directed specifically to the sentences for counts twelve and thirteen, in which an accomplice was involved. That person created the letterheads and supporting documentation to enable the relevant claims to be made, having the technical expertise to do so.

30 As to those counts, his Honour said in his remarks:

The law also regards the commission of offences “in company” as aggravating the criminality. The commission of an offence with an accomplice is for the purposes of the law committing the offence in company. It is not difficult to understand why working with an accomplice should be regarded as an aggravating feature. It supplies the offender with greater resources and options to commit the offences he would commit.

31 Mr Odgers argued that his Honour had misconceived the notion of the commission of crime in company as an aggravating factor. It is such a factor, he said, only in cases where it has an adverse effect upon the victim of a crime. By way of example, he referred to the offence of sexual intercourse without consent in circumstances of aggravation, that is, being in company, under s61J(2)(c) of the Crimes Act (NSW). The rationale of that aggravating factor is that the presence of more than one offender is more coercive and intimidating of the victim: R v Button & Anor [2002] NSWCCA 159; (2002) 129 A Crim R 242. He argued that this is the sense in which the expression “in company” is enacted as an aggravating factor for State offences in s21A(2)(e) of the Crimes (Sentencing Procedure) Act 1999.

32 He accepted that an aggravating factor of that kind would be recognised in sentencing for Commonwealth offences, even though it is not one of the matters enumerated in s16A(2) of the Crimes Act (C’th). He noted, however, that the present case is not of that kind. Indeed, he argued that the applicant’s criminality would have been greater if he had committed those two offences on his own and kept all the money obtained from them.

33 The Crown prosecutor submitted that his Honour’s approach was sound, and that the notion of the commission of an offence in company as an aggravating factor is not confined in the manner for which Mr Odgers contended. He referred to R v Harmouche [2005] NSWCCA 398; (2005) 158 A Crim R 357. That was a Crown appeal against a sentence for supplying cocaine, in which Hulme J, delivering the leading judgment, held that the fact that the respondent was a participant in a network of drug supply meant that his offence was committed in company for the purpose of s21A(2)(e) of the Crimes (Sentencing Procedure) Act: see the judgment at [28] and [69].

34 Mr Odgers made it clear that he pursued this ground of the application only for the purpose of achieving an adjustment of the sentences on those two counts which would leave the overall head sentence intact but lead to a reduction of the effective non-parole period. Certainly, viewed in isolation, the concurrent sentences of imprisonment for twenty-seven months for those two counts are moderate and, even if his Honour were found to be in error, they would not warrant this Court’s intervention. The competing arguments are worth recording and are not without interest. However, as will be seen, I find it unnecessary to decide them because of the view I take of the application as a whole.

35 Mr Odgers’ challenge to the effective non-parole period of three-and-a-half years was on two bases. That non-parole period is just under 78 per cent of the overall head sentence of four-and-a-half years. He noted that the ratio of non-parole period to sentence for Commonwealth offences is usually in the range of 60 to 66 per cent, and he argued that the proportion in the present case should have been within that range.

36 For this he relied upon Cahyadi v The Queen [2007] NSWCCA 1; (2007) 168 A Crim R 41. That was a case involving related Commonwealth and State offences, in which this Court held that the practice relating to Commonwealth offences should have been applied to the determination of the effective non-parole period: see the leading judgment of Howie J at [37]-[39]. Howie J observed that that applicant’s criminality had been primarily in contravention of Commonwealth law, and concluded:

It seems to me in such a situation to be unfair to sentence by complying with the more severe State regime under s44, where the statutory ratio is 75 per cent, rather than by adopting the practice for determining the non-parole period for Commonwealth offences, where the ratio is 60 to 66 per cent.

37 Mr Odgers also noted that in the present case his Honour departed from the statutory ratio between sentence and non-parole period in relation to the State offences, the ratio of the effective non-parole period for those offences of twelve months to the overall sentence of seventeen months being 71 per cent. Yet that proportion was not maintained in the overall sentence for all offences, and Mr Odgers argued that this was a case in which there was clearly a basis for a finding of special circumstances under the State sentencing regime warranting a significant reduction from the usual proportion of 75 per cent. He relied on the applicant’s subjective case generally but, particularly, upon his gambling addiction, which had provoked his criminal activity and for which he needed prolonged treatment.

38 The Crown prosecutor sought to distinguish Cahyadi on the basis that in that case the State offence was seen as no more than incidental to the Commonwealth offences, whereas in the present case the State offences stood alone and represented a separate phase of serious criminal activity. I can see the force of that argument, just as I can see the force of Mr Odgers’ submission that it might have been beneficial for the applicant to have an extended period of parole eligibility to adjust to life in the community and, particularly, to address his long standing gambling addiction. Again, however, I find it unnecessary to decide either of those matters.

39 The difficulty the applicant faces is that both the overall sentence and the effective non-parole period are lenient. His Honour rightly stressed the seriousness of these offences. This was major and systematic fraud, perpetrated over two lengthy periods by a man occupying important positions of trust. It is settled law that, while an important function of a non-parole period is the rehabilitation of an offender by affording the opportunity of release under supervision and sanction, it must also mark the offender’s criminality by reflecting considerations of punishment and deterrence: R v Simpson (2001) 53 NSWLR 704, per Spigelman CJ at [63]–[64]. In my view, no lesser non-parole period would serve that function in the present case: s6(3) of the Criminal Appeal Act.

40 Since preparing these reasons I have had the benefit of reading in draft the reasons of Basten JA. I remain of the view that it is unnecessary to decide Mr Odgers’ argument based upon Cahyadi. This is not the occasion to re-examine the line of authority concerning the approach to setting non-parole periods for Commonwealth offences.

41 I would grant leave to appeal but dismiss the appeal.

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LAST UPDATED: 10 September 2007

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