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Supreme Court of New South Wales - Court of Criminal Appeal |
Last Updated: 1 July 2020
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Court of Criminal Appeal Supreme Court New South Wales
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Case Name:
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Humphreys v R
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Medium Neutral Citation:
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Hearing Date(s):
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28 February 2020
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Date of Orders:
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1 July 2020
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Decision Date:
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1 July 2020
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Before:
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Simpson AJA at [1]
Johnson J at [2] Hamill J at [158] |
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Decision:
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1. Extend time for the Applicant to seek leave to appeal against sentence
until 25 October 2019.
2. Grant leave to appeal against sentence. 3. Quash the aggregate sentence imposed at the Sydney District Court on 28 October 2016. 4. In its place, sentence the Applicant by way of an aggregate sentence to imprisonment for a period of seven years comprising a non-parole period of four years and three months commencing on 27 October 2016 and expiring on 26 January 2021, with a balance of term of two years and nine months commencing on 27 January 2021 and expiring on 26 October 2023. 5. The earliest date upon which the Applicant will be eligible for release on parole is 27 January 2021. |
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Catchwords:
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CRIMINAL LAW - sentence - applicant convicted after trial of offences of
recklessly dealing with proceeds of crime contrary to s.193B(3)
Crimes Act 1900
(23 counts) and attempting to commit offences under s.193B(3) (five counts) -
sophisticated scheme to defraud bank by means of fraudulent loan applications -
applicant sentenced to aggregate
sentence of imprisonment for nine years and two
months with non-parole period of six years and three months - co-offender
convicted
at later separate trial of knowingly dealing with proceeds of crime
contrary to s.193B(2) Crimes Act 1900 (23 counts) and attempting to commit
s.193B(2) offences (five counts) - co-offender sentenced to aggregate sentence
of imprisonment for six years with a non-parole period of four
years - different
maximum penalties for offences under s.193B(3) (10 years’ imprisonment)
and s.193B(2) (15 years’ imprisonment) - applicant claims legitimate sense
of grievance arising from lesser aggregate sentence imposed on
co-offender -
principles of parity, proportionality and relativity of sentences considered -
relevance of co-offender receiving lesser
aggregate sentence for offences
carrying greater maximum penalties arising out of the same criminal enterprise -
consideration of
objective and subjective factors relating to the applicant and
the co-offender - breach of proportionality principle established
- appeal
allowed - applicant resentenced taking into account proportionality principle -
lesser aggregate sentence passed
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Legislation Cited:
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Cases Cited:
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Atilgan v R [2018] NSWCCA 5
Dayment v R [2018] NSWCCA 132 Dunn v R [2018] NSWCCA 108 Dwayhi v R (2011) 205 A Crim R 274; [2011] NSWCCA 67 Elias v The Queen (2013) 248 CLR 483; [2013] HCA 31 Gaggioli v R [2014] NSWCCA 246 Gilmour v R [2018] NSWCCA 295 Green v The Queen; Quinn v The Queen (2011) 244 CLR 462; [2011] HCA 49 Hanley v R [2018] NSWCCA 262 Ivory v R [2014] NSWCCA 181 Jimmy v R (2010) 77 NSWLR 540; [2010] NSWCCA 60 Jones v The Queen (1993) 67 ALJR 376 Kentwell v The Queen (2014) 252 CLR 601; [2014] HCA 37 Lowe v The Queen (1984) 154 CLR 606; [1984] HCA 46 Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39 Nguyen v The Queen (2016) 256 CLR 656; [2016] HCA 17 Pham v R (2009) 193 A Crim R 190; [2009] NSWCCA 25 R v Chandler; Chandler v R [2012] NSWCCA 135 R v Formosa [2005] NSWCCA 363 R v Kerr [2003] NSWCCA 234 Rend v R (2006) 160 A Crim R 178; [2006] NSWCCA 41 Ruttley v R [2010] NSWCCA 118 Shortland v R (2013) 224 A Crim R 486; [2013] NSWCCA 4 The Queen v De Simoni (1981) 147 CLR 383; [1981] HCA 31 The Queen v Kilic (2016) 259 CLR 256; [2016] HCA 48 |
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Texts Cited:
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Category:
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Principal judgment
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Parties:
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John Alexander Humphreys (Applicant)
Regina (Respondent) |
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Representation:
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Counsel:
Mr GD Wendler (Applicant) Ms C Curtis (Respondent) Solicitors: Monica McKenzie Solicitors (Applicant) Solicitor for Public Prosecutions (Respondent) |
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File Number(s):
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2014/196570
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Publication Restriction:
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Decision under appeal:
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Court or Tribunal:
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District Court of New South Wales
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Jurisdiction:
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---
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Citation:
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---
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Date of Decision:
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28 October 2016
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Before:
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Her Honour Judge Girdham SC
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File Number(s):
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2014/196570
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JUDGMENT
The Offences, Aggregate Sentence and Indicative Sentences
Ground of Appeal
An Extension of Time is Required
Prosecution of the Applicant and his Co-Offenders
Difference Between Charges Against the Applicant and Barnes
Facts of Offences
Overview of Offences
Role of Barnes
Role of Applicant
Benefits to the Applicant from the Offences
(a) he went on a $100,000.00 trip to Las Vegas and Los Angeles together with Kiss and their girlfriends for four days at the end of February 2009, involving business class flights and luxury accommodation with the trip being paid for using the Applicant’s American Express card which was eventually paid off using fraudulent funds from his Viridian Line of Credit account;
(b) meals at high-end restaurants in Sydney and accommodation in luxury hotels in both Sydney and Melbourne paid for using the Applicant’s American Express card with the card account paid off from the Applicant’s Viridian Line of Credit account;
(c) purchases from the online auction company, Grays, once again paid for by the Applicant’s American Express card with that being paid from the Applicant’s Viridian Line of Credit account;
(d) a $4,000.00 suit;
(e) the sum of $127,000.00 of the fraudulently obtained money was transferred from the Applicant’s Viridian Line of Credit account to his company, Humphreys Financial Services Pty Limited;
(f) the sum of $34,000.00 was paid onto the Applicant’s MasterCard account from his Viridian Line of Credit account;
(g) the sum of $300,000.00 was paid to the Applicant from the Chang loan funds;
(h) as the Applicant acknowledged in his electronically recorded interview with police, the fact that the money deposited in the first instance into his Viridian Line of Credit account meant that he could reduce the monthly interest payment on that account and her Honour remarked that this must have been significant as that account had been in debit to the sum of around $900,000.00; and
(i) a number of properties were bought in the names of shelf companies set up by the Applicant - her Honour accepted, however, that these had largely been purchased for Kiss and not the Applicant, although her Honour did not accept entirely a defence submission that a property purchased in the Applicant’s company’s name in Nowra was intended exclusively for the benefit of Kiss.
Sentencing Remarks of her Honour Judge Girdham SC Concerning the Applicant
“Relevantly, during the trial I ruled that the Crown were required to establish the element of ‘recklessness’ as required in s 193(3) of the Crimes Act 1900, by proving actual knowledge pursuant to the extended definition in s 4 of the Act. The jury was so instructed. The verdicts of guilty meant the jury was satisfied beyond reasonable doubt that each offender was reckless based on actual knowledge being established upon each offence.
There is no issue that the sentence proceedings will proceed with reference to the available maximum penalty of ten years for each of the 28 offences, in order to avoid any breach of the principle in R v Di Simoni [1981] HCA 31; 147 CLR 383.”
“The Crown case was reliant on the jury being satisfied beyond reasonable doubt that each of the accused was part of a joint criminal enterprise to obtain monies from the Commonwealth Bank dishonestly by the deception as to false valuations, and that the subsequent use by each of the accused of those funds amounted to dealing with the proceeds of crime.
Mr Humphreys, in his defence, agreed that he handled the loan applications and forwarded them to Darren Barnes at the Commonwealth Bank, and that he was directly involved in accessing and distributing the loan funds. He did not know that each one of these loan applications, individual applicants and the individuals behind the company entities were false. He did not know the rates notices and the contracts for sale which he sent off with the loan applications to Mr Barnes were false and contained false statements as to property values. He had no idea that the valuations drawn from them were grossly inflated and false.
His evidence was that he proceeded on the basis that the valuations were correctly stated and that he played no part in the scheme to deceive the Commonwealth Bank into advancing the loan funds by presenting false valuations and using Darren Barnes as the inside man to process them.
His case relied on what he told the police in the two interviews conducted with him by the police and in which he spoke about Mr Kiss telling him that this was a really good opportunity to buy cheap properties for his clients. He said that Mr Kiss would present him with a title deed but Stephen Vickers was the client manager who managed the processes and was putting the property transactions together.”
“The jury, by their verdicts, rejected the explanations given by Mr Humphreys in the two interviews about managing investments for Mr Kiss's clients and the sworn evidence of Mr Kiss. The evidence of each offender's involvement in the scheme as asserted by the Crown, that they did so with knowledge that the monies obtained were for proceeds of crime is overwhelming.
It is clear from the above that the offences committed by each offender are serious. It is necessary that I make an assessment of the relative seriousness of each offence, the assessment of which is part of the process of instinctive synthesis to be applied by a sentencing Judge. It is necessary to have regard to the maximum penalty and the nature of the criminal conduct prescribed by the offence (see Markarian v The Queen (2005) HCA 25 - 228 CLR 357 at 372).
The maximum penalty is imprisonment for 10 years. Such penalty invites comparison between the worst possible case and the case at bar, and in that regard, it provides, taken and balanced with all other relevant factors, a yardstick.
It has not been contended by the Crown that any of the offences for which the offenders stand to be sentenced fall into the worst case category.”
“Central to the sentencing exercise is the fact that each offender is to be sentenced on the basis that they were participants in a joint criminal enterprise with respect to the offences. It is uncontroversial that participants in a joint criminal enterprise are equally responsible for all the acts in the course of carrying out the enterprise regardless of who commits them.
In order to take into account the level of culpability of each offender, it is desirable to identify the role played by each in the enterprise. It is to be accepted that if the objective criminality of one participant is demonstrated to be less than another participant, even if not to a very substantial degree, and that apart from any differences in the subjective circumstances of the offenders, the lesser objective criminality should be reflected in a lesser sentence, see R v Wright [2009] NSWCCA 3 and [28] to [30].”
“I accept Mr Humphrey’s role as being subordinate to that of Mr Kiss. Nevertheless it is apparent he was heavily involved in the scheme; he had a role in both the application processes, as well as the collection and distribution of funds. He also had input as to how the scheme would be best advanced.”
“I find it difficult to make a definitive finding as to the position of Mr Humphreys beyond reasonable doubt. I will venture to say he was somewhat subordinate to Mr Kiss. Nor can I be satisfied as to what he expected to receive as a result of his participation.
I am satisfied Mr Humphreys was integral to the success of the scheme [and] had expectations of receiving substantial reward. Mr Humphreys played an important role in the scheme, being operative in the management of it, receiving, processing and directing the applications and the collection and distribution of the funds. He was the facilitator of serious criminal activity - being the business of money laundering.
I will reflect these findings, as I must, when having regard to parity in the sentences to be imposed.”
“In conclusion, each offence involved considerable and sophisticated planning. Counts 1 to 24 resulted in substantial loss committed for financial gain, and had involved a series of criminal acts namely the improper use of title deeds irregularly obtained; multiple false documentary representations in bank forms; false signatures; false and forged identity documents including passports; and false authority documents to facilitate transfer of the loan funds to Mr Humphreys’ Commonwealth Bank line of credit account. The scheme also included making corrupt payments to Mr Barnes, the bank employee, which must be accepted as a feature which aggravates the gravity of the offending, see Tsakonas v R [2009] NSWCCA 258.
The features of the offending I have identified warrant the conclusion that each offender engaged in various serious criminal conduct exhibiting a high degree of criminality. Each offence is a serious example of an offence of its kind. Such a conclusion is required when regard is had, as it must be, to the premeditation and planning, the numerous offending acts which accompanied each offence, and the substantial amount of monies dealt with. In my view, each count attracts the same conclusion, the gravamen being the mental element which accompanies the wrongdoing and the monetary value of each offence being roughly similar.
Whilst no monies were advanced in relation to the attempted offences, the criminality was otherwise of high order.”
“No oral or sworn evidence was taken on the sentence proceedings on behalf of Mr Humphreys and his subjective case was put by the tender of the pre-sentence report dated 3 August 2016; a report from Dr Lennings, clinical psychologist; numerous medical reports together with a number of reference letters, including from the offender himself and his wife. In the absence of evidence from the offender or the other authors, the Crown's submission is that little weight would be afforded to the untested statements therein, I am relying on R v Qutami [2001] NSWCCA 353; [2001] 127 A Crim R 369.
As to S. 21A factors, it is submitted, on his behalf, that he does not have a significant record of previous convictions, S. 21A(2)(e). He is unlikely to reoffend, S. 21A(2)(g); and has good prospects of rehabilitation, S. s 21A(2)(h).
Mr Humphreys does have previous convictions for fraud, from when he was at university. They are old and have little significance to the sentencing exercise now before me.
The offender was born on 10 September 1969 and is 47 years of age. He is married with three children. He is educated to university level with a Bachelor of Business and Accounting, sub-majoring in property law. He attained a certified public accountants licence. This licence has been lost, together with his capacity to work in the industry by reason of his convictions. As a result of his participation in this joint criminal enterprise, he has lost his property portfolio, which he had been building since 1994. He was discharged bankrupt in 2015.
Since his involvement in the scheme, he first obtained employment as a part time cleaner for a period of 18 months and, more recently, he has performed ad hoc documentation work for a property development company and is said to be instrumental in the National Real Estate and Property Development Organisation, who, as at the date of that report, had offered him a fulltime position. There can be no doubting his work ethic. The offender consulted Dr Lennings on 15 September 2016 and did not display any symptoms suggestive of a psychological or neurocognitive disorder, rather he was assessed as psychologically tough-minded and having high self- esteem and generally presenting himself as a person who is a pro social member of the community.
Mr Humphreys, in his letter to the Court, addressed his health and submits that, ‘Justice is poorly served by negatively affecting a person's health so much that it accelerates morbidity’. In the final paragraph he states, ‘I apologise to the Court for the time and cost of running a case which resulted in a guilty verdict. I accept the position’.
The offender's health concerns are high blood pressure and sleep apnoea, both of which have been diagnosed since his convictions.
Whilst on remand pending sentence, he has received medication and treatment, both of which require to be monitored. Insofar as it was suggested that the CPAP machine would not be available to the offender in custody, due to the requirement for Wi Fi, I am advised that this is not so. There is the capacity for continued treatment and monitoring of both conditions in prison. In determining the appropriate sentence I will have regard to the fact that the offender has health issues which may impact on his comfort whilst in custody.”
“It is proper to take into account the time at which remorse was first exhibited and also the degree of insight that it reflects. Notwithstanding my reservations of expressions of remorse and how those expressions resonated in an acceptance of responsibility, they are very late. Notwithstanding, I have determined to make some modest allowance for it in the appropriate sentence.
The fact of remorse impacts upon the mitigating factors set out in s 21A(3) of the Crimes (Sentencing Procedure) Act, namely the offender's likelihood of reoffending and prospects of rehabilitation. Both Dr Lennings and the author of the pre-sentence report assessed the offender at low risk of re-offending. Notwithstanding those assessments were against the history which I have set out above, I am prepared to accept this is probably so, and as a result of his realisation as to the effect his offending is to have on his young family.”
“General deterrence is a matter of significance. Each offence and their combination demonstrates the purpose of the participants in the joint criminal enterprise engaged in money laundering as a business. And they did so with a mens rea greater than mere recklessness. Whilst the graduation of the seriousness of the offences in s 193 bears upon the mental state of the offender and not the foundational crime, the nature of the crimes is not irrelevant.
Here those offences involved deliberate deception on the part of the joint criminal enterprise participants to induce a financier to provide a loan which would not otherwise have been provided. This offending strikes at the heart of the commercial finance and credit systems, given that the financial systems rely upon, and cannot properly function without prospective borrowers providing true and correct information. There is therefore a need to protect the integrity of the commercial finance and credit system.”
“I should also indicate that I have made allowance for considerations of parity. I am of the view that Mr Humphreys' role, whilst integral to the success of the venture, was less than that of Mr Kiss, whom I am satisfied stood at the apex.
Furthermore, Mr Humphrey’s subjective case is marginally better than that of Mr Kiss, and these differences will be reflected in each sentence and in their aggregate.”
Sentencing Remarks of his Honour Judge Zahra SC Concerning Barnes
“Consistent with the Crown case led at trial, I find that the accused role in the scheme was to process the loan applications using the false documentation he had been provided with.
The offender processed all of the applications in his capacity as a mobile lender, a role he had been undertaking for some years and in which he had significant experience. The accused well understood the bank procedures and policies and was aware of the requirements of his role as a mobile lender including the need to ensure the reliability of property valuations supplied to the bank in support of the loan applications.
The offender was required to generate loans and meet set targets for loan activity. Further the offender was expected to source his own clients, to meet clients and personally interview them and complete loan applications on behalf of the bank. The bank provided the offender with a car, phone services and a computer which was used to remotely access the bank's centralised computer systems. The evidence establishes that in the course of processing the loans the offender was required to meet each of the applicants and sight proof of their identity, relying on records such as leases, passport or other identification including Medicare card or driver licence. Further the offender was expected to verify a prospective borrower's financial capacity to repay the loan by obtaining documents to prove their income and assets such as payslips and taxation group certificates.
The evidence led in the Crown case revealed that the applications submitted by the offender the subject of each of the counts here were irregular in many respects. A substantial part of the Crown case involved evidence from a bank investigator, Mr Goss, setting out particular irregularities in each of the applications.
I find consistent with the Crown case led at trial that the accused did not inform the bank that Mr Humphreys was the person referring the series of loan applications to him for processing and that he did not inform the bank that he was offered and expected to receive benefits from Mr Humphreys and Mr Kiss for processing the loans.
The offender processed the loans contrary to the banks normal procedures by failing to make proper checks as to the identity of the applicants, their stated incomes and assets. The evidence establishes that the verification documents in relation to an applicant's identity and financial position and their assets and liabilities were meant to be sent to a records area in the Commonwealth Bank so they could be scanned and otherwise copied into the banks computer records. The evidence establishes that in relation to the loan applications, with very few exceptions, none of the verification documents for the loans were entered into the bank records system.”
“The offender participated in a sophisticated fraudulent scheme involving three other participants. Each of the participants had distinct roles. The fraud was perpetrated from August 2008 until early April 2009, a period of about eight months.
As I have indicated, the scheme involved the preparation of numerous documents containing false information that were provided to the offender. These documents included false employment statements and false statements of assets and liabilities of the applicants. There is no evidence that the offender played any role in the preparation of the fraudulent documents which were provided in support of the loan applications. The applicants were fictitious individuals and fictitious corporate entities.
Consistent with the findings of Girdham J, I find the evidence identifies a clear hierarchy of the participants. It was Mr Kiss who stood at the apex of the scheme. He had a close connection with Mr Vickers who prepared documentation. The handwritten applications and financial statements presented as written and signed by the applicants were prepared by Stephen Vickers. It was he who was responsible for arranging the payment and use of the loan funds advanced from property purchases by the company entities. It was he also who falsely represented that he was the agent for the directors of the companies and gave instructions to two solicitors firms. Mr Vickers gave the documentation to Mr Humphreys who in turn provided the documentation to the offender. I have earlier set out in detail the role of Mr Humphreys. In my view Mr Humphreys also occupied a position towards the top of the hierarchy of operatives within this criminal scheme.
There is no evidence that the offender played any role in the fabrication of those documents or in creating the false applicants or entities. The offender was however involved in the processing of the first 23 loan applications up to the time of settlement. The offender had a continuing role in the last five applications before the bank intervened.
In my view, also consistent with the findings of Girdham J, the evidence of the distribution of the proceeds of the monies is a useful tool in determining the hierarchy of operatives within the joint criminal enterprise here. Most of the money was used jointly by Mr Humphreys and Mr Kiss to purchase properties and other luxury items including expensive cars and overseas travel. They were major beneficiaries of the monies which were fraudulently obtained. Substantial amounts of money appear to have been used to repay debts.”
“The amount the offender received was a very small portion of the total monies advanced by the bank during the course of the fraudulent scheme. The co-offenders Mr Kiss and Mr Humphreys were the main beneficiaries of the monies and each received substantial payments. I am unable to determine with precision the extent Mr Vickers benefited and it is unnecessary here to do so. In my view the differentiation in the monies advanced provides some insight into the hierarchy of operatives within the criminal scheme here. The conclusion of the offender's role is not however an arithmetical process where the amount of money each received, when quantified, is then applied as a formula in determining the precise role and the extent of criminality of the participants and the culpability of each of the offenders in the scheme. Whilst it is some indication, it is by no means determinative.
In the case of the offender here his particular role was a crucial one and involved the use of his position and understanding of the banks processes to obtain substantial amounts of money and his conduct involved a substantial breach of trust.
The offender was able to use the experience he gained as an employee of the Commonwealth Bank over many years in order to circumvent the processes for the obtaining of loans and in particular circumventing the process of obtaining proper valuations before the bank advanced the funds. The offender was engaged as a lender since 2000. He would therefore have had a thorough knowledge of the banks practices in ensuring they retained a valid security for the loans they would advance.
The offender's role was significant and central to the success of the enterprise. Without the offender circumventing the processes for the valuation of the properties independent valuations would have been required. The offender used his ability to access the bank database and to manipulate the entry of data so that the bank would accept the false valuations contained in rate notices and noted on contracts for sale.”
“The offender's role was not limited to the circumventing of the valuation process. He was also involved in the disbursement of loan funds to Mr Humphreys and Mr Kiss for purposes unrelated to the loan applications. The offender processed a number of authorities which directed the proceeds of the fraudulent activity to Mr Humphreys in a sum exceeding $2,250,000. The authorities directed payments to Mr Humphreys, Mr Daniel Kiss and his wife Karen Maloney.”
“The offender did not give evidence in the trial. Whilst he gave evidence during the proceedings on sentence he maintained his innocence. Whilst such involvement of the offender in a crime of such scale against the likelihood of detection is puzzling, I am unable to make any findings that the offender was vulnerable because of financial pressures or that he acted for any other reason other than greed. As I have indicated when referring to the principles in R v Olbrich, if there are matters that I would take into account in favour of the offender I would need to be satisfied of those matters on the balance of probabilities. If I am unable to make such a finding the matter must proceed upon an assessment of the objective facts. That is the process I have undertaken here. The only conclusion that can be reached is that the offender was motivated by financial gain and greed.
The offending is objectively of a high order and the sentences imposed must reflect a significant component of deterrence.”
“The presentence report notes that upon testing the offender is assessed as a low risk of reoffending. Further he is unlikely to benefit from a period of supervision by Community Corrections due to his low risk rating and lack of criminal factors that need to be addressed.
This is the first period in custody the offender has served. His imprisonment has and will be in the future a significant deterrent to further offending. The offender appears to be clearly traumatised by finding himself in custody and is suffering debilitating psychological distress.
The offender faces a lengthy period of imprisonment and will require assistance in transitioning into the community after serving his sentence. For these reasons I find special circumstances.
The offender has not expressed remorse. Whilst the offender continues to maintain his innocence and appears to have little insight into his offending I am of the view the offender has good prospects of rehabilitation and is unlikely to re-offend.”
“I intend to impose an aggregate sentence. This does not mean that considerations of accumulation are no longer relevant. The ultimate sentence imposed must reflect the total criminality. It is necessary to ensure that the aggregation of all sentences is a just and appropriate measure of the total criminality involved. The aggregate non parole period must reflect the minimum period of imprisonment required to be served by an offender having regard to all the purposes of justice.”
“Parity of sentence:
The parity principle recognises that equal justice requires that, as between co-offenders, there should not be a marked disparity which gives rise to a 'justifiable sense of grievance' Lowe v The Queen [1984] HCA 46; (1984) 154 CLR 606.
The Crown submits that the sentencing of the co-offenders Mr Kiss and Mr Humphreys are a ‘useful reference point’ (W/S 27 October 2017 [48]). The Crown however submits that the co-offenders were sentenced for offences under section 193B (3) of recklessly dealing in the proceeds of crime where the maximum penalty of 10 years is significantly lower than the maximum penalty for the offences for which the offender was convicted under s 193B (2) (being a maximum term of 15 years). The Crown goes on to note (at [49]):
‘[49] The co-offenders were convicted and sentenced for the lesser offences involving ‘recklessness’ but the Crown relied at their trial on the extended definition of recklessness to prove actual knowledge for all charges. The jury received clear directions in relation to that aspect of the Crown case and returned verdicts of guilty.
[50] Regard must be had to the longer statutory maximum penalty for these offences. The fact that the more serious charges were laid does not entail ‘prejudice’ or ‘aggravation’ in charging or consequently, in the sentence to be imposed on the offender.’
As I have already noted, Girdham J, when assessing the state of mind of the co-offenders Mr Kiss and Mr Humphreys when passing sentence, noted that during the trial of the co-offenders a ruling was made that ‘...the Crown were required to establish the element of ‘recklessness’ as required in section 193B(3) of the Crimes Act 1900, by proving actual knowledge pursuant to the extended definition in section 4 of the Act. The jury was so instructed. The verdicts of guilty meant the jury were satisfied beyond reasonable doubt that each offender was reckless based on actual knowledge being established upon each offence’.
At the outset the offender was charged with the same offence involving the mental element of recklessness as was proffered against Mr Kiss and Mr Humphreys at their trial. During the proceedings on sentence here the Crown Prosecutor informed the court that subsequent to the conviction of Mr Kiss and Mr Humphreys the DPP determined that the proper charges against the offender were charges involving knowledge that the money was the proceeds of crime under s 193B(2) and a direction for ex officio charges was given in June 2016.
All four, being Mr Kiss, Mr Vickers, Mr Humphreys and the offender were committed for trial on the same charges. The trials were separated over objection by the Crown with the trials of Mr Kiss and Mr Humphreys ordered to be tried jointly but separate to the trial of the offender and Mr Vickers. When the offender's trial was listed to commence with Mr Vickers the trial involving the offender was separated from the trial of Mr Vickers because Mr Vickers' trial could not proceed at that time primarily because of his ill-health.
The Crown submits that in the separate trial of the offender the Crown was entitled to lay charges for the more serious offence and that the sentencing must proceed on the basis of the maximum penalty available for the offences for which the offender was convicted.
The result of the decision of the Crown to prosecute the offender for offences under section 193B (2), which attracts a significantly greater maximum penalty, is that the offender faces that greater maximum even though the Crown case is that the offender was effectively the employee of Mr Humphreys and Mr Kiss and that Mr Humphreys and Mr Kiss operated at the top of the hierarchy within the criminal enterprise here. The Crown has proceeded against Mr Kiss and Mr Humphreys for an offence which carries a substantially lesser maximum penalty. The separation of functions however does not permit the court to canvass the exercise of the prosecutor's discretion in a case in which it considers a less serious offence to be more appropriate. Here there was no submission at the time the offender was indicted before the jury that the exercise of the prosecutorial discretion to proceed with more serious charges against the offender was an abuse of process.
As the authorities indicate, it would be wrong for the court to try to apply an extended version of the parity principle when comparing sentences of two people involved in a common enterprise and factoring out the extent to which the difference in sentences is a function of the prosecutorial discretion.
Counsel for the offender submits in written submission that whilst there are different maximum penalties ‘...If the co-offenders were reckless, it is submitted that there is no doubt that they in fact knew the origin of the funds as their involvement was much more important than that of the offender’. Further the offenders ‘... were at the highest end of ‘recklessness’ whereas the offender was at the very low end of the scale of ‘knowing’ (W/S at 7.1).
In setting the sentence I have exercised caution in ensuring I have not incorrectly applied principles of parity.”
The Sole Ground of Appeal Alleging Breach of the Parity Principle
Applicant’s Submissions
Crown Submissions
Decision
“193B Money laundering
(1) A person who deals with proceeds of crime -
(a) knowing that it is proceeds of crime, and
(b) intending to conceal that it is proceeds of crime,
is guilty of an offence.
Maximum penalty - imprisonment for 20 years.
(2) A person who deals with proceeds of crime knowing that it is proceeds of crime is guilty of an offence.
Maximum penalty - imprisonment for 15 years.
(3) A person who deals with proceeds of crime being reckless as to whether it is proceeds of crime is guilty of an offence.
Maximum penalty - imprisonment for 10 years.
(4) It is a defence to a prosecution for an offence under this section if the defendant satisfies the court that the defendant dealt with the proceeds of crime to assist the enforcement of a law of the Commonwealth, a State or a Territory.”
“4A Recklessness
For the purposes of this Act, if an element of an offence is recklessness, that element may also be established by proof of intention or knowledge.”
“The judge sentencing each offender, whether the same judge or different judges, must sentence for the offence for which each offender stands convicted or to which each has pleaded. If one offence bears a lower level of culpability, as reflected in the maximum penalty, that is an important factor to be weighed in the sentencing. It may not be decisive: the same conduct may be a low range example of the more serious offence, but a high range example of the less serious offence. Taking such factors into account is only a ‘difficulty’ if one starts with a presumption of equal outcomes: such a presumption is not in conformity with the process which involves a weighing of different and often conflicting factors.”
“There are significant limitations, however, on reducing a sentence on the basis of that of a co-offender who has committed a different crime. At least some of the limits on the use of the parity principle in such a case are:
1. It cannot overcome those differences in sentence that arise from a prosecutorial decision about whether to charge a person at all, or with what crime to charge them: Howard; Wurramarbra; Formosa;
2. If it is used to compare the sentences of participants in the same criminal enterprise who have been charged with different crimes, there can be significant practical difficulties. Those practical difficulties become greater the greater the difference between the crimes charged becomes, and can become so great that in the circumstances of a particular case a judge cannot apply it, or cannot see that there is any justifiable sense of grievance arising from the discrepancy: Gibson; Howard; Formosa;
3. It cannot overcome differences in sentence that arise from one of the co-offenders having been given a sentence that is unjustifiably low: Armstrong; Diamond; Rexhaj; Isamundar;
4. There are particular difficulties in an applicant succeeding in a disparity argument where the disparity is said to arise by comparison with the sentence imposed on a co-offender who has been charged with an offence that is less serious than that of the applicant: Krakouer; Pham; Woodgate. See also R v Stanbouli [2003] NSWCCA 355; 141 A Crim R 531 at [127]- [134]. However Nguyen stands as one example where that result arose.”
“245 The principle of parity should not be confined to a consideration of the sentences imposed upon co-offenders in the strict sense, that is persons involved in and charged with the very same crime. There is nothing in the decisions of the High Court that so confine it. Where the courts have stated that the principle of parity applies only to co-offenders, it has usually been in situations where the applicant has sought to use the principle for an illegitimate purpose by seeking to compare the sentence imposed upon the applicant with a sentence imposed upon another offender who was not engaged in the offence committed by the applicant.
246 The principle, whether it is called parity or proportionality or relativity between sentences, should be applied to bring about a just result in the sentences imposed upon persons who have been engaged in the same criminal enterprise regardless of the charges that have actually been laid against the offenders. However, I agree with Campbell JA that the principle is subject to the limits stated in [203] of his judgment.
247 In particular I agree, for the reasons given by his Honour, that R v Kerr [2003] NSWCCA 234 should no longer be followed insofar as the proposition for which it is generally cited. It is not the business of the courts to try to ameliorate the effects of prosecutorial decisions in charging, or not charging, persons involved in a criminal enterprise. The facts of Kerr do not, in my respectful opinion, justify the decision taken and this Court has not since Kerr was decided found or been able to envisage a situation in which a court would be justified in taking into account the effects of prosecutorial discretion when exercising the sentencing discretion. I have been concerned at the number of times that Kerr has been relied upon in this Court, at least when I have been a member of it, without any reference being made to the decisions that have raised doubts about its correctness.”
“Further to the above, I would also reiterate my agreement with the view expressed by Campbell JA and Howie J as to the appropriate treatment of the judgment of this Court in R v Kerr [2003] NSWCCA 234. It is fundamental to the system of justice operating in this State that it is for the prosecuting authority, alone, to exercise the discretion as to the charge to be preferred; it is for the accused, alone, to determine the plea to be entered; and it is for the sentencing judge, alone, to impose a proper sentence in all of the circumstances for the offence proved. It is no part of the function of a sentencing judge to seek to alter the effect of the exercise of the discretion of the prosecuting authority as to the charge to be preferred.”
“The legitimate grievance ground may be called in aid, in appropriate circumstances, where complaint is made concerning parity, proportionality or relativity between sentences of related offenders involved in the same criminal enterprise regardless of the charges that have actually been laid against the offenders: Jimmy v R at 85 [246].”
“In Lowe v The Queen and in Postiglione v the Queen, this Court was concerned with the application of the parity principle to persons charged with the same offences arising out of the same criminal conduct or enterprise. Those decisions are not authority for the proposition that the principle applies only to persons so charged. The foundation of the parity principle in the norm of equality before the law requires that its application be governed by consideration of substance rather than form. Formal identity of charges against the offenders whose sentences are compared is not a necessary condition of its application. Nevertheless, as Campbell JA recognised in Jimmy v The Queen, there can be significant practical difficulties in comparing the sentences of participants in the same criminal enterprise who have been charged with different crimes. The greater the difference between the crimes, the greater the practical difficulties, particularly where disparity is said to arise out of a sentence imposed on a co-offender who has been charged with an offence that is less serious than that of the appellant. The existence of those difficulties may be accepted. So too may the inability of a court of criminal appeal to undertake, under the parity rubric, a de facto review of prosecutorial charging discretions. Those practical difficulties and limitations, however, do not exclude the operation of the parity principle. The effect given to it may vary according to the circumstances of the case, including differences between the offences with which co-offenders are charged.”
“Parity is concerned with the equal treatment of co-offenders. As Green v The Queen explains, the principle is not confined to co-offenders in the strict sense. It has application in the sentencing of persons involved in the same criminal enterprise. The norm of equality discussed in Green v The Queen is not disturbed by sentencing an offender for the offence for which he or she has been convicted and not by reference to a different, less serious, offence which the court considers to be more appropriate to the offending conduct.”
“Prosecutors are subject to a duty of fairness in the exercise of their important public functions. In the unlikely event that the discretion to prosecute a particular charge (or at all) was exercised for some improper purpose, the court has the power to relieve against the resulting abuse of its process. The time for debate as to any claimed abuse arising out of the selection of the charge is before the entry of a plea. After an offender has been convicted of an offence it risks compromising the impartiality and independence of the court to require that it sentence by reference to an offence of which the offender has not been convicted but which it considers the prosecution should have charged.”
“53 This Court is familiar with complaints that depend upon a co-offender who is charged with a less serious offence and consequently receives a lesser penalty. It has consistently declined to extend its supervisory role, under the guise of the parity principle, to prosecutorial discretions: see, eg Pham v R [2009] NSWCCA 25, per Latham J.
54 This case, however, is different: KR was charged with a more serious offence, carrying a heavier penalty; he was nevertheless dealt with more leniently. That would, in my opinion, ordinarily give rise to the application of parity principles.”
“106 As I have already indicated, his Honour considered that because Wormleaton had been convicted of a more serious offence and had received a discount for his pleas of guilty and assistance, the principle of parity in sentencing did not apply. However, notwithstanding these differences between the appellant and the co-offender Wormleaton, I consider that it was still necessary for the sentencing judge to impose a sentence on the appellant such that there would be a due proportion between the sentence passed on the appellant and the sentence or sentences passed on Wormleaton Postiglione v The Queen [1997] HCA 26; (1995-1996) 189 CLR 295 at 301-302 per Dawson and Gaudron JJ. The principle of due proportionality in sentencing co-offenders was applied in Postiglione, notwithstanding a number of differences between Postiglione and the co-offender Savvas.
107 The judge who sentenced Wormleaton quantified a combined discount for Wormleaton’s pleas of guilty and assistance as 50 per cent, so that the sentence which would have been imposed on Wormleaton for the offence of armed robbery, absent the plea of guilty and the assistance, would have been five years.
108 I accept the submission by counsel for the appellant that the sentence imposed on the appellant of four years was unduly severe, when compared with a sentence of five years, which would have been imposed on Wormleaton but for his pleas of guilty and assistance. Wormleaton was sentenced for a more serious offence of armed robbery, whereas the appellant was sentenced for the less serious offence of robbery simpliciter. It is clear that Wormleaton took the leading role in the planning of the offence for which the appellant was sentenced, the preparation for the offence and the actual carrying out of the offence. At the time of committing the offence of armed robbery, Wormleaton was on bail and subject to a bond. The sentence imposed on Wormleaton was partly concurrent with the sentences imposed for the other offences committed by Wormleaton.
109 As, in my opinion, the challenge to the appellant’s sentence based on Postiglione v The Queen has been made good, it is unnecessary to consider the remaining grounds of appeal against sentence. I would grant leave to the appellant to appeal against sentence and I would allow the appeal against sentence.”
Resentencing the Applicant
(a) extend time for the Applicant to seek leave to appeal against sentence until 25 October 2019;
(b) grant leave to appeal against sentence;
(c) quash the aggregate sentence imposed at the Sydney District Court on 28 October 2016;
(d) in its place, sentence the Applicant by way of an aggregate sentence to imprisonment for a period of seven years comprising a non-parole period of four years and three months commencing on 27 October 2016 and expiring on 26 January 2021, with a balance of term of two years and nine months commencing on 27 January 2021 and expiring on 26 October 2023;
(e) the earliest date upon which the Applicant will be eligible for release on parole is 27 January 2021.
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