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Regina v Leonard; Regina v Rose Matter Nos 60100/97 [1997] NSWSC 187 (9 May 1997)

FILE NO/S: 60100/97

60128/97

DELIVERED: Friday 9 May 1997

HEARING DATE: Friday 9 May 1997

PARTIES: REGINA v ANTHONY ROBIN LEONARD

REGINA v CHARLES ROSE

JUDGMENT OF: Gleeson CJ, Grove J, Sperling J

COUNSEL

1^st APPELLANT - P Byrne SC

2^nd APPELLANT - M F Adams QC

RESPONDENT - B Martin QC with G J Bellew

SOLICITORS

1^st APPELLANT - Jeffreys & Associates

2^nd APPELLANT - Phillips Fox

RESPONDENT - Commonwealth DPP

RESULT: Appeals dismissed

CATCHWORDS

CRIMINAL LAW AND PROCEDURE - SENTENCE - CONSPIRACY TO DEFRAUD COMMONWEALTH (TAXATION) - ATTEMPTING TO PERVERT COURSE OF JUSTICE - FULL TIME CUSTODY FOLLOWED BY RECOGNIZANCE RELEASE ORDER - ALTERNATIVE OF PERIODIC DETENTION - SUFFICIENCY OF EXPRESSION OF REASONS FOR REJECTING ALTERNATIVE - EXCHANGES BETWEEN BENCH AND BAR DO NOT REPRESENT REASONS FOR DECISION - SERIOUSNESS OF PARTICULAR FACTS - SENTENCES NOT INAPPROPRIATE

NO OF PAGES: 25

GROVE J: Each of the applicants seeks leave to appeal against the severity of sentence imposed by Christie DCJ on 28 February 1997 at Sydney District Court. Each had pleaded guilty to one count of conspiring to defraud the Commonwealth and Rose had also pleaded guilty to a count of attempting to pervert the course of justice. The applicant Leonard was sentenced to twelve months imprisonment with an order that he be released upon recognizance in the sum of $200 to be of good behaviour for two years after serving four months of that sentence. His Honour passed an identical sentence upon Rose for the conspiracy count and sentenced him to a fixed term of six months imprisonment for attempting to pervert the course of justice. The latter was ordered to be served concurrently with the sentence on the conspiracy count so that actual release upon the recognizance release order would not occur until six months had been served.

The applicants were partners in an advertising agency. They were both involved in activity directed to evading taxation liabilities. The modus operandi was broadly similar and related to the creation of false claims for deductible expenditure. An invoice and coordinate cheque butt from Archetype Constructions purported to demonstrate that $8,965 had been paid for repairs and maintenance to the business premises. It was noted that Mrs Rose had been an employee of Archetype Constructions and had access to its stationery. Police investigations included extraction of the actual cheque matching the butt and it was revealed that the cheque was drawn to cash, signed by both Leonard and Rose and endorsed by Rose. No work was done by Archetype Constructions nor was any payment received by it. A cash book maintained by the applicants' business nevertheless purported to show payment for work done.

A second aspect of the offence related to false invoices purporting to relate to payments for printing envelopes for teabags and bulk tea packs. Both the applicants had approached a Mr Allen a principal of R & M Graphics and asked for his help to "take some money out of their business". Allen's company did not do any of the work for which invoices were given but the records of the applicants' business purported to include the payments. The amount involved exceeded $70,000 and an operation of round robin style took place with cheques and final deposits to the personal account of Leonard in the sum of $38,250, to Rose in the sum of $42,584.36 and $15,660.46 into the account of M.P. Stenning. The lastmentioned is the maiden name of Rose's wife. Allen retained $2,082.83. He was granted an undertaking not to prosecute by the DPP.

The third aspect involved a business called Square Concepts conducted by one David Egan. He was initially approached by Rose and asked to bill the Leonard and Rose partnership for work which he had not performed. He was offered $100 for every cheque that was cashed pursuant to such arrangement. Over a period of months he wrote out invoices from a book specially purchased at Rose's suggestion for this purpose. Rose further advised Egan that he should buy a new invoice book for every invoice that he wrote and then dispose of the balance so it could not be traced. He noticed that on occasions Rose endorsed numbers on invoices which gave the appearance that they emerged from a volume of transactions.

After Egan had written each invoice he would give it to the bookkeeper at the applicants' business. Rose would telephone him when the cheque was ready and he would call to collect it and the two of them would go by car to the bank. Rose would routinely wait in the car whilst Egan went to the bank to cash the cheque and when he returned with the proceeds Egan would receive the promised $100 fee. On one occasion Egan remembered seeing Rose divide the cash into two portions and place it in separate pockets. It was not part of Leonard's case that he was unaware of this activity. Egan was also granted an undertaking against prosecution.

So far as the count for attempting to pervert the course of justice is concerned it suffices to note that when it became obvious that the taxation authorities were likely to discover the fraud, Rose approached Egan and made several suggestions including that Egan should hide from the Taxation Department and that to that end he would provide him somewhere else to live or alternatively pay the airfare of Egan and his girlfriend to go to Ireland "until this had passed over". The latter suggestion was rejected as Egan's parents were apparently on their way at the time from Ireland to visit him here in Australia. Later further offers were made to find Egan a new place to live, and to pay for a solicitor to arrange any legal work in respect of new accommodation. Rose later again had conversations with Egan in which he attempted to arrange with him to tell the taxation authorities that the relevant money was his and advised him that he should "act naive".

That rather lengthy recitation of undisputed facts has been given to demonstrate that the applicants had not succumbed to some sudden temptation nor had they acted because they found themselves in some unexpectedly parlous financial circumstances. It is clear that at the time of the offences they were in receipt of substantial income and as the learned sentencing judge observed their offences should be classified as arising out of greed rather than need. Nor is it without significance that the activities of the applicants involved the recruitment of others, at least Allen and Egan, into criminal misconduct.

The written submissions filed on behalf of each applicant contend in substance that Christie DCJ erred in failing to avail himself of the sentencing option of ordering that imprisonment be served by way of periodic detention. Oral submissions received by the Court were essentially in elaboration of that proposition, subject to matters to which I will later make special reference.

I deal first with submissions advanced on behalf of the applicant Leonard. Four errors are attributed to his Honour:

(i) His Honour found the applicant did not plead guilty at the first opportunity;

(ii) His Honour considered himself to be but the representative of the community and it was "the community and the community requirements that determined the length and breadth of various criminal sentences", which led his Honour to give inadequate weight to the effect on the applicant's family, in the special circumstances of their situation, of a sentence of full time imprisonment;

(iii) His Honour considered that he was bound by decision of courts of other jurisdictions (dealing with similar but not identical offences) necessarily to impose a custodial sentence and order that some part of the sentence be actually served, in effect that he could not impose a sentence to be served by way of periodic detention; and

(iv) His Honour gave inadequate weight to the subjective features of the applicant's case.

As to the first proposition it was contended that Leonard did not dispute the matters to which he ultimately pleaded guilty but did dispute other allegations which ultimately were not pressed and it was therefore said that he pleaded guilty on the first occasion it was legally possible to do so following the resolution of the disputed matters. This is contested by the Director of Public Prosecutions who points to the nature and extent of submissions made at the conclusion of the committal proceedings which extended over twelve sitting days. This Court has not examined the material advanced at the committal proceedings but it is common ground that submissions were made that no prima facie case of any conspiracy was made out against the applicant at the conclusion of the prosecution case before the Local Court. I am unpersuaded that the sentencing judge has been shown to have made any material error.

The second submission relates to some observations by his Honour which I would classify as quasi-philosophical but they stand a long distance from showing that his Honour avoided his own duty to assess appropriate penalty and imposed one derived from assessments attributable to some ethereal body of "the community". It cannot be argued that the situation of the applicant's family was ignored as his Honour made specific reference to it when he said, "Mr Leonard has a comparatively young family. He has a wife who is facing some significant difficulties with or without the problems that are presently facing her husband but I accept without the slightest reservation that the problems of Mr Leonard's wife are severely exacerbated by the present proceedings and by the threat of a custodial sentence which hangs over her husband. Indeed, that situation is the subject of some further evidence this very morning. I take into account that any custodial sentence served by the prisoner Leonard would have a grave effect upon his wife and consequently a grave effect on his young children."

The submission that his Honour failed to weigh these matters is entirely without merit and no error in the process is demonstrated.

The third proposition derives from an observation by his Honour that "the vast majority of the reports of decisions which bind this Court and bind me it would seem, place upon myself as representative of the community the necessity to order a custodial sentence and to order that some part of that sentence be actually served".

Earlier in his remarks his Honour had referred to what he had called the wealth of judicial pronouncements in relation to this type of offence which the parties had showered upon him. He had adjourned the proceedings from late December until February for the purpose, inter alia, of reading these decisions. I take his Honour's remarks to mean no more than that as a result of reading all that material he had come to the conclusion that in this case service of some full time custody was appropriate.

It is convenient to interpolate here matters which I indicated would be the subject of some special reference. The argument was adopted on behalf of both applicants and although I am conscious that I am presently dealing with some specific grounds raised on behalf of the applicant Leonard I will not repeat these observations when I come to deal with the separate arguments advanced on behalf of the applicant Rose. The matters arise in this context. An affidavit of Clive Vaughan Jeffreys sworn 8 May 1997 was filed, the purport of which was to fill a claimed gap in the transcript. It refers, not to evidence, but to exchanges between bench and bar, however, the Director of Public Prosecutions Mr Martin QC who appeared for the respondent Crown did not object to the tender on the basis that it supplemented the transcript.

The significant parts of the affidavit read:

"4. During submission on sentence on 19/12/96 Counsel for the respondent said that the offence required a sentence of `a custodial sentence, a full time custodial sentence or some lesser form of custodial sentence. One option is periodic detention' or words to similar effect.

5. After this was said his Honour said `I never give periodic detention' or words to similar effect.

6. His Honour also said `periodic detention is a joke' or words to similar effect. "

Accepting for present purposes - and I emphasize the qualification - that the recitation is accurate and, importantly, complete I consider that no more is revealed than a robust exchange in which his Honour's reference may be seen as most likely to the circumstance that a sentence of imprisonment for a fixed term to be served by way of periodic detention will not in fact be served as stated but, after attendance for a fraction of the term, a convict will perform tasks virtually indistinguishable from community service: R v Hallocoglu 1992 29 NSWLR 67.

The second, and more sinister implication, is that his Honour was inferring that for subjective reasons, he was unwilling ever to consider periodic detention and that therefore his statement that he considered some form of custodial sentence must be given was deceptive in that he had excluded one of the only two possibilities of type of custody. Custody must be either continuous or periodic.

Insofar as it was advanced, I reject the contention. The trial judge's remarks on sentence expose the reasons for his decision and it is entirely inappropriate for counsel on appeal to trawl forensic exchanges and seek to impose them upon the judge as representing his considered judgment. It suffices to note that judges may, and I expect not infrequently do, make challenging statements in order to derive assistance from the responses of advocates. It would be absurd to require judgment from an appellate court by sifting remarks made during such exchanges in order to decide which were challenges and which revealed some undisclosed, or even suppressed, reasons for decision.

As I have said, I reject the contentions, and I observe that such submissions should be condemned and, in the absence of substantiating evidence, firmly discouraged.

Before leaving this topic I might recall that the underlying error in the current proposition was recognized over fifty years ago and provoked this succinct statement by way of a practice note of the Privy Council. A note can be found in the Weekly Notes (U.K.) 1942 @ 89:

"During the hearing of an appeal Viscount Simon L.C., referring to reports which might be made of the case, said that it was well understood that interlocutory observations of members of the Board or of a Court were not judicial pronouncements. They did not decide anything, even provisionally. They were made to elucidate the argument, to point the question, or to indicate what were the matters which the judicial spokesman thought needed to be investigated, and that was all. ............................"

A corollary argument contended that his Honour was in error in failing to implement an alleged concession by the Crown. This also emerged out of discussion between the trial judge and counsel but at its highest the Crown Prosecutor acknowledged that periodic detention was within possible range. The answer to the contention can be short and that is that the discretion was reposed in and to be exercised by his Honour and not the Crown Prosecutor. In any event, an acknowledgment that periodic detention was within range did not imply that full time custody was outside of discretionary range.

The fourth proposition asserting that inadequate weight was given subjective features is scarcely a designation of error of law. In the absence of any error of fact or law the question for this Court is whether the sentence in the circumstances was outside the range of the sound exercise of judicial discretion. I do not believe that the complaint that his Honour might have overlooked the availability of the option of periodic detention can be sustained. Towards the end of his remarks he expressly said that he felt driven to the conclusion "that some form of a custodial sentence is required" and I mentioned already that there are only two forms of custodial sentence: that which is served full time and that which is served by way of periodic detention.

However, in deference to the arguments earnestly advanced by senior counsel for both applicants, I would propose that this Court look for itself at the question of sentence on the conspiracy charge which is common to the applicants and assess appropriate penalty. In my opinion, the conspiracy offences would not be adequately met by imprisonment served by way of periodic detention and a period of full time custody should be imposed. My reasons for that judgment are principally twofold.

First, the offences are markedly serious and this is manifest in the organization, planning and execution of the scheme accompanied by the recruitment of others and as I have detailed earlier in these remarks. Second, the offences arose out of the deliberate submission of false information into a system which is largely reliant for its effectiveness on the supply of accurate information; offences, given the volume of information which must obviously be processed, are likely to be difficult to detect and a sentence acting as a general deterrent should be imposed.

The sentence received by the applicant Leonard should be confirmed. It should not be overlooked that the recognizance release order after four months of custody involves not inconsiderable leniency.

I turn to the separate submissions by Rose. Written submissions on his behalf adverted to five express matters:

(i) His Honour erred in his application of s 17A of the Crimes Act 1914 to the facts and circumstances of this case;

(ii) The learned trial judge has not adequately explained why a sentence of periodic detention would not have been appropriate;

(iii) His Honour failed to have regard to the provisions of s 16G of the Crimes Act 1914;

(iv) His Honour the sentencing judge failed to take sufficient account of punishment already suffered by the applicant;

(v) The sentence on the charge of attempting to pervert the course of justice is manifestly excessive.

The submission in relation to the first proposition is surprising in that it completely omits any reference to the circumstance that at p 8 of his remarks on sentence Christie DCJ expressly recited the formula in s 17A of the Crimes Act and stated that he was bound to give effect to it. I observe that what is sought to be done is demonstration of some error by cross referencing remarks of various judges concerning the approach which might be taken in what might be called revenue offence cases. What does emerge is that courts of authority have said that they are unwilling to establish a prima facie rule that an offender against such laws must go to gaol but that the nature of such offences is a circumstance - and an important one - to be taken into account when determining sentence. The remarks of Christie DCJ not only contradict the proposition that he overlooked the section but they manifest that he was seeking to apply it.

The second proposition regarding the service of imprisonment by periodic detention has been dealt with as I indicated during judgment on the submissions concerning the applicant Leonard.

I reject the further implication contained in this submission that it is the sentencing judge's duty to elaborate upon each of the sentencing options which he has rejected, rather I would perceive it his duty to expose the reasons which lead to the selection of the chosen option.

It is true that s 16G of the Crimes Act 1914 requires a sentencing judge to have regard to the unavailability of remissions in this State. I acknowledge the authority of the rule of thumb provided by D.P.P. v El Karhani 1990 21 NSWLR 370. The present case did not attract an elaborate application. The question of remission is basically relevant to actual time served and in this case the sentencing option chosen by his Honour included custody, followed by release on recognizance during the term. His Honour was obviously perfectly well aware that the consequence of his order would be that the applicant would serve six months before actually being released.

I am unwilling to find error in the absence of ritual incantation of specific reference to s 16G reduction in the context of the relatively short confinement followed by release on recognizance. Even if that view be incorrect and what counsel described as a highly "technical" breach should be taken to be demonstrated, there was no miscarriage provoking the exercise of this Court's jurisdiction.

The fourth proposition advanced on behalf of the applicant Rose does no more than re-assemble the consequential effects of sentence. There is no reason to conclude that his Honour should have dealt with the applicant more leniently than he did because of those consequences.

The final submissions advanced on behalf of the applicant Rose related to the sentence for attempting to pervert the course of justice. It was submitted that conduct of the sort which amounts to such an offence covers a broad range of criminal culpability. I agree. The applicant embraces the observation by the sentencing judge that this offence fell towards the lower end of range. The sketch of facts which I have set out above shows that the attempts by the applicant to persuade Egan to assist him avoiding justice or to cover his tracks were repeated and I would describe them as persistent. His Honour's imposition implies that he regarded six months fixed term by which he extended the four months custody for the offence of conspiracy a further two months as the low end of the scale. It was in my view markedly lenient. The ground should be rejected.

I propose that in each case the application for leave to appeal against sentence be granted but the appeal dismissed and the sentences confirmed. The applicant Leonard should surrender into custody to serve the term imposed below and receive credit for those days already served.

GLEESON CJ: I agree with the orders proposed by Grove J and with his reasons.

So far as the applicant Rose is concerned I would find it convenient to consider the matter by dealing first with the final argument, that is to say, the submission that the sentence imposed in respect of the attempt to pervert the course of justice was manifestly excessive, or that his Honour's reasoning in relation to that revealed error.

In my view no error has been shown in his Honour's reasoning on that point, and in the facts and circumstances of this case the sentence was not excessive.

The consequence is that periodic detention disappears as a practical possibility in relation to the applicant Rose. The reason is that, as the sentences were structured, the sentence of six months' fixed term of imprisonment in relation to the attempt to pervert the course of justice was longer than, and included, what might be described as the non-release period in relation to the offence of a conspiracy to defraud the revenue.

However, in the case of both the applicant Rose and the applicant Leonard, strong argument has been directed by senior counsel to the failure of the learned sentencing judge to deal expressly in his reasons with the matter of periodic detention. For my part I have found his Honour's failure expressly to deal with that matter troubling. I accept the force of the argument put by senior counsel for both applicants that, having regard to the way in which the case was conducted for the Crown his Honour should have made explicit reference in his reasons to the matter of periodic detention.

There was a certain ambiguity in what was put to his Honour by the Crown in that regard. In fairness, it should be noted that what was said about periodic detention in relation to the charge of conspiracy to defraud the revenue was said against the background that the Crown was strongly urging his Honour that periodic detention was not an available option in relation to the offence of attempting to pervert the course of justice in the case of the applicant Rose.

On a reading of what the Crown Prosecutor raised in the course of argument, what was referred to as a concession amounted to no more than the proposition that it was a matter for the discretion of the sentencing judge as to whether any term of imprisonment should be served by way of full time custody or periodic detention, so that if in the exercise of his discretion his Honour concluded that periodic detention was appropriate in relation to the charge of conspiracy to defraud the revenue, then that was a matter with which the Crown would not take issue.

Because of the strong arguments that were advanced by senior counsel for each applicant, like Grove J, I have concluded that it would be appropriate for this Court to consider for itself the question of the alternative of periodic detention, although, for reasons I have already given, that consideration is somewhat theoretical in the case of the applicant Rose.

In my view in the facts and circumstances of the present case, especially having regard to the importance of general deterrence, an appropriate exercise of sentencing discretion required the imposition of a sentence involving full time custody for a period of not less than that involved in the sentences imposed.

I would add before concluding that towards the end of argument in this Court a submission was made that an appropriate disposition of the matter would have been for home detention. This was not an argument which was raised at first instance and, as I understood the submission, it was one for us to consider in the event that we came to resentence the applicants. For the reasons I have already expressed in giving my views about the alternative of periodic detention, I would also consider that it was not an appropriate case for home detention.

SPERLING J: I would like to add something very brief for my own part. First, I should say I agree with the orders that have been proposed by Grove J and with the reasons his Honour has given for those orders.

I also agree with what Gleeson CJ has said. This was a case which required serious consideration to be given to periodic detention as an alternative to a full time custodial sentence. However, the case involved a high degree of dishonesty, more than a mere mis-statement of fact in an income tax return. It involved creation of fictitious transactions. It involved repeated dishonesty providing an opportunity for reconsideration. It involved the recruitment and corruption of others. In the case of Mr Rose, it also involved an attempt to pervert the course of justice.

Having regard to those considerations, this was a case which required full time custodial sentences in relation to both applicants in the interests of general and individual deterrence.

GLEESON CJ: The orders of the Court will be as proposed by Grove J.

ADAMS: I understand that there are significant delays in classification of prisoners. My client has four months to serve as a result of this order but we would respectfully ask, having discussed this matter with the appropriate officers in the Commission, for this Court to recommend that my client, Mr Leonard, be immediately classified.

CROWN PROSECUTOR: That is not opposed.

GLEESON CJ: Yes, we are happy to make that recommendation.