Reported Decision: 177 A Crim R 121 New South Wales Court of Criminal Appeal CITATION: Robertson v R [2007] NSWCCA 270 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S): 28/08/07 JUDGMENT DATE: 26 October 2007 JUDGMENT OF: Basten JA at 1; Latham J at 2; Rothman J at 3 (i) Leave to appeal be granted; (ii) Appeal be granted only to the following extent: The sentence imposed on 22 September 2006 be quashed and in lieu thereof Mr Robertson be sentenced as follows: DECISION: (a) Count 1: Defrauding the Commonwealth: a period of imprisonment of five years and six months commencing 22 September 2006 and concluding 21 March 2012; (b) Count 2: Attempting to defraud the Commonwealth: a period of imprisonment of three years and six months commencing on 22 March 2008 and concluding on 21 September 2011; (c) The two offences contained in s. 16BA Schedule have been taken into account in sentencing on Count 1; (d) Non-parole period: an overall non-parole period of three years and six months commencing 22 September 2006 and concluding on 21 March 2010. CATCHWORDS: CRIMINAL LAW - Sentence appeal - Commonwealth offences - Defraud the Commonwealth - Conspiracy to defraud the Commonwealth - Plea of guilty - Delay in prosecution - Serious offences - Exercise of discretion - No error of law - New sentence to correct administrative or clerical error. LEGISLATION CITED: Crimes Act 1914 (Cth) El-Chaar v R [2007] NSWCCA 16 McKenna v R [1999] NSWCCA 358 R v Bloomfield (1998) 44 NSWLR 734 R v Bugeja [2001] NSWCCA 196 R v Lyon (1906) 3 CLR 770 CASES CITED: R v Ronen (2006) 161 A Crim R 300; [2006] NSWCCA 123 R v Todd [1982] 2 NSWLR 517 Vogel v Anderson (1967) 120 CLR 157 R v Khamas (1999) 108 A Crim R 499 Mill v R (1988) 166 CLR 59 R v Blanco (1999) 106 A Crim R 303 R v Barker; R v Gibson [2006] NSWCCA 20 PARTIES: John Thomas Robertson (Applicant) Regina (Respondent) FILE NUMBER(S): CCA 2006/5156 COUNSEL: M. Buscombe (Applicant) I.B. Bourke (Crown) SOLICITORS: S. O'Connor / S. Etherington (LAC) F. Farah (CDPP) LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): 04/11/1107 LOWER COURT JUDICIAL OFFICER: Finnane DCJ LOWER COURT DATE OF DECISION: 22/09/06 IN THE COURT OF CRIMINAL APPEAL 2006/5156 BASTEN JA LATHAM J ROTHMAN J 26 SEPTEMBER 2007 John Thomas ROBERTSON v REGINA Judgment 1 BASTEN JA: I agree with the orders proposed by Rothman J and with his Honour's reasons. 2 LATHAM J: I agree with the orders of Rothman J and with the reasons for those orders. 3 ROTHMAN J: John Thomas Robertson, with the assistance of his 16-year-old son, Stuart John Hangar, defrauded the Commonwealth by making false claims to the Australian Taxation Office for GST refunds. On one occasion, Mr Robertson falsely claimed that companies with which he was associated purchased computer equipment to the value of over $8 million. He received a rebate from the ATO of $322,934. Mr Robertson, on another occasion, attempted to defraud the Commonwealth, utilising the same method, falsely claiming acquisitions of $4,807,654 and supplies of $1,297,807 that, if that Business Activity Statement (BAS) return were accepted, would have resulted in a GST refund of $319,077. 4 A verification officer with the ATO, whose suspicions were aroused, sought verification of the claims, which was not forthcoming, and the second refund was never paid. 5 The Commonwealth Director of Public Prosecutions charged Mr Robertson with defrauding the Commonwealth and attempting to defraud the Commonwealth in relation to the claims for the amounts described above. Mr Robertson pleaded guilty and on 22 September 2006 was sentenced in the District Court of New South Wales to imprisonment for an aggregate non-parole period of three years and six months and an effective overall head sentence of five years and six months. Mr Robertson seeks leave to appeal the sentence imposed on the grounds that his Honour erred by: (i) Failing to take properly into account his plea of guilty; (ii) Failing to take properly into account the delay in investigation and prosecution of the offences; (iii) Imposing a manifestly excessive sentence; (iv) Imposing a manifestly excessive non-parole period; (v) Incorrectly reciting the intended concluding dates of the sentences. 6 Mr Robertson submits that a less severe sentence is warranted in law and that the Court should intervene to reduce the sentence accordingly. 7 It is necessary, before dealing with each of the grounds in the appeal, to recite more fully the circumstances of the offences, particularly because they involved a significant and lengthy period of pre-planning. The Method by which The Commonwealth was Defrauded 8 In January 2000 Nambucca Ridge Pty Ltd was registered, the directors being Mr Robertson and Mr Hangar. In May 2000 a bank account in the name of the company was opened at the National Australia Bank and ATM cards were issued to both Mr Robertson and Mr Hangar. Also in May 2000 the company lodged an application for ABN and GST registration. 9 As it is now fairly widely known, when a company that is registered for GST purposes purchases goods or services in the course of its business, the GST that it has been charged and paid on those goods or services may be claimed from the Commissioner of Taxation and, if the claim is accepted, the amount is refunded. 10 Because Nambucca Ridge utilised, for GST purposes, a cash accounting system (as distinct from an accrual basis), it was only after the GST had been paid to another that a rebate could be claimed from the ATO and paid by the ATO to Nambucca Ridge. 11 On 20 October 2000, Nambucca Ridge lodged a BAS with the ATO. That Statement falsely claimed that Nambucca Ridge had purchased goods valued at $3,552,276 on which GST had been paid and claimed a refund from the ATO of $322,934. It was signed "S. Hangar". On 14 November 2000, the Commissioner of Taxation paid the claimed rebate. 12 On 10 December 2000, Nambucca Ridge lodged a further BAS, this time falsely claiming that the company had purchased $4,807,654 of goods and services upon which GST had been paid. It also claimed that it had charged to its clients $1,297,807 worth of goods or services and had received GST in relation to those goods or services. It claimed, therefore, a GST refund of $319,077 (the difference between GST paid and received). 13 Officers of the ATO had a number of conversations with officers of Nambucca Ridge requesting verifying documents for the claim. No such documents were ever forwarded. The Commissioner of Taxation never paid the rebate related to this latter claim. 14 In January 2001 Mr Robertson purchased shelf companies, seeking the back dating of the registration of the purchase for the purpose of assisting in the fraud he sought to perpetrate on the Commonwealth. There were a number of such transactions. 15 Between November 2000 and January 2001 Mr Hangar, at the request of Mr Robertson and as part of the scheme devised by him, provided false and misleading information to the ATO officers about the claims. The provision of false and misleading information occurred over a period of time. In particular during a course of interviews, particularly an interview on 27 March 2001, Mr Robertson told the ATO officers that the purchases that underpinned the claim for a refund were made from one of the shelf companies that he had established. 16 Mr Robertson supplied the ATO with false invoices purportedly supporting the claim for a refund of GST. An elaborate hoax was perpetrated involving false allegations of loans, finance through a 90-day bill and returns of equipment valued at about $3 million. Further, Mr Robertson claimed that the business had held stock to the value of around $8 million. Each of these claims was false and each of them was made for the purpose of perpetrating the fraud on the Commonwealth. 17 Mr Robertson lied to the ATO about other matters including the age of his son, the provision of commercial bill facilities to the business by suppliers and the existence of documents evidencing such arrangements. Further, Mr Robertson admitted that he understood that GST could be claimed only after the goods or services had actually been purchased and payment made for them. 18 On 11 April 2001, the ATO interviewed Mr Robertson for the purpose of an audit. Mr Robertson presented a forged document purporting to represent the commercial bill on which he had relied in earlier discussions. He falsely asserted the existence of suppliers' invoices relevant to the transactions and that the business possessed stock at a value of $8,750,000, $4 million of which was stored at Castle Hill and Minto. 19 On 20 December 2001, the ATO executed a search warrant upon the offices of Blake Dawson Waldron, solicitors, and seized documents that disclosed arrangements between Mr Robertson and Blakes for the preparation of a promissory note to the value of $8,750,000, the issue date for which was 1 April 2001, the date the offender instructed the firm to draft the commercial bill. The forged document Mr Robertson presented at the meeting on 11 April 2001 was a backdated copy of the commercial bill prepared by Blakes on 1 April 2001. The involvement of Mr Robertson in the fraud is further evidenced by documents seized when another search warrant was executed on Mr Robertson's residence. I do not recite all of the forged and original documents seized. It is sufficient for present purposes to note that those documents disclose an extensive involvement in a long trail of activities undertaken to perpetrate the frauds. 20 Mr Robertson sought to have the Court take into account two further offences under section 16BA of the Crimes Act 1914 (Cth) and was sentenced accordingly. Those offences, taken into account in sentencing for the primary offences, were offences of precisely the same kind committed in relation to one or other of the shelf companies and relate to GST refunds of $169,570 and $23,167 respectively. 21 Of the $322,934 received by way of refund from the ATO, none has been repaid to the Commonwealth. Nor has there been any payment by Mr Robertson of any tax penalty. Grounds 1 & 2: Proper Account of the Plea and Delay in Prosecution 22 These two grounds, which can conveniently be dealt with together, rely upon an extract from the remarks on sentence in which his Honour said: "In my opinion, but for the fact of the delay and having regard to the plea of guilty, the appropriate sentence for the first offence should be six years' imprisonment. Because of the unacceptable delay I proposed to reduce that to five and a half years." 23 Section 16A(2)(g) of the Crimes Act requires a plea of guilty to be taken into account in sentencing. Mr Robertson submits that his Honour's remarks, extracted above, are ambiguous and on one view of the comments allows a reduction of six months in six years (8 1/3 percent) for both the plea of guilty and the delay. I disagree. His Honour's extracted comment allows the reduction solely on account of the delay in the prosecution. I do not accept that there is any ambiguity in the comment of his Honour. The words "having regard to" are intended to have meaning and an effect; and ambiguity arises only if they are given no meaning. His Honour's intention was to discount the sentence further for the delay after stating an appropriate starting point for the sentence, which starting point had already been factored into it a reduction in sentence for the plea of guilty. 24 A delay in investigation and prosecution of an offence may, when lengthy, lead to a degree of leniency being extended: R v Todd [1982] 2 NSWLR 517 at 519. Delay is, a factor to the extent that it affects fairness because, for example, of changed circumstances, additional suspense or anxiety, significant periods on conditional liberty, inexplicable delay by the prosecuting authority, and the like: see R v Khamas (1999) 108 A Crim R 499; Mill v R (1988) 166 CLR 59; R v Blanco (1999) 106 A Crim R 303. 25 This Court recently dealt with the issue in R v Barker; R v Gibson [2006] NSWCCA 20 (Howie J, with whom Basten JA and Hall J agreed) where it was said: [78] The delay in the prosecution of the respondents was not of the quality that could lead to any significant reduction in the ultimate sentence to be imposed. This case was very different from Todd or other cases where significant regard has been given to the effect of delay. This could not be regarded as a stale offence after a period of only two years delay and having regard to its seriousness. In any event, the impact of delay will play a significant role in the determination of the appropriate sentence in those cases where the delay is due to the operation of the judicial system and not to the actions of the offender: R v Kay [2004] NSWCCA 130 at [28]. It has little application where, as here, the respondents either chose to say nothing at arrest or, as in the case of the respondent Barker, denied the offence and gave the police a false account of his movements: R v Hathaway [2005] NSWCCA 368 at [44]. [79] One of the reasons why delay mitigates the offence is because of the uncertainty left in the mind of the offender. The only uncertainty suffered by the respondents was whether the police would be able to make a case against them. That is not relevant uncertainty for the application of the principle: R v Shorten [2005] NSWCCA 106 at [19]. Presumably, when they were let go without charge, they thought they were "home and hosed". I do not believe for one minute that they were affected by any uncertainty about the prospects of being charged with that offence. They simply went on committing offences. In the present case the respondents chose to plead not guilty, as was their right, until after the trial date was fixed. But they can hardly complain of the delay up to committal and from committal to trial when they could have pleaded guilty at any time: R v Bragias (1997) 92 A Crim R 330. Nor was the delay before charging shown to be unreasonably lengthy. 26 On any view the delay in this case was not excessive or unexplained. Nevertheless, his Honour allowed a significant discount, which, if it were related solely to the issue of delay, as I have found, is more than sufficient, if it were necessary at all. 27 Earlier in the hearing on sentence, his Honour had said, in response to the submission that the plea of guilty should be taken into account, that it had saved the jury (and the judge) from having "to sit and hear the most dreary and uninteresting evidence" and "being swamped with thousands of pieces of paper and the details of numerous conferences and the like. So you are quite right. He should get a discount for that." Further his Honour, when referring to the "plea of guilty, … his age, his health," and the delay, said that he would take all of that into account. He went on to say: "He is still entitled to a significant discount. These trials are long and difficult, very hard to keep juries focused on them. The complexities of the tax system are such that when the tax officers start to explain it to most people, the reaction is they fall asleep and their eyes glaze over. They can't follow it. Trying to explain the GST system to people, most of whom probably don't pay it, they have never paid it, is just so mind-boggling. So if anybody pleads guilty, obviously they are saving or assisting the due administration of justice in a significant way. However, he is not entitled to 25 percent discount. That is obvious." 28 His Honour then proceeded to set an appropriate sentence "having regard to the plea of guilty" and discount it further for the delay. 29 While too much regard should not be had to exchanges between counsel and a sentencing judge, the above exchanges show clearly that his Honour had in mind the provision of a discount not at the highest end of the scale. His Honour confirmed that approach in his remarks on sentence, immediately prior to the passage first extracted, when he said: "He has pleaded guilty, although ultimately only at the point of trial. It was put that he should get a high discount because of his plea of guilty." 30 While it is desirable, for the sake of transparency, it is not essential, in sentencing for Commonwealth offences, to identify separately and to quantify the discount for the utilitarian value of the plea: R v Bugeja [2001] NSWCCA 196 at [24] – [28]. No error is disclosed on this basis. Grounds 3, 4 & 5: Manifest Excess of Sentence and Non-Parole Period and the Warrant for a Less Severe Sentence 31 It is necessary, in dealing with these grounds of appeal, to set out the particular sentences imposed for each offence. As already stated the effective overall sentence was five years and six months with a non-parole period of three years and six months. 32 The individual sentences imposed by his Honour for each matter are as follows: Count 1: Defrauding the Commonwealth: a period of imprisonment of five years and six months commencing 22 September 2006 and concluding 21 March 2013 (sic); Count 2: Attempting to defraud the Commonwealth: a period of imprisonment of three years and six months commencing on 22 March 2008 and concluding on 21 March 2012 (sic); Non-parole period: An overall non-parole period of three years and six months commencing on 22 March (sic) 2006 and concluding on 21 March 2010. 33 As can be seen from the above, and as was accepted before this Court, there is a slip in the expression of the calculation in the fixing of the sentence. This Court will correct that slip, although it could have been and should have been raised with his Honour for correction under the slip rule. 34 The sentence for Count 2 is wholly concurrent with the sentence for Count 1. Each of the offences charged is a contravention of section 29D of the Crimes Act 1914 (Cth), as are the two offences taken into account under section 16BA of that Act. Each contravention carried a maximum penalty, at the relevant time, of 10 years' imprisonment and/or a fine of $110,000. The sentence imposed, for four offences either charged or taken into account, is imprisonment for five years and six months, with a non-parole period of three years and six months: McKenna v R [1999] NSWCCA 358. 35 The major thrust of Mr Robertson's submission on manifest excess (of the sentence and the non-parole period) has two prongs: a comparison with Judicial Commission statistics; and a comparison with a number of notorious serious cases of defrauding the Commonwealth by false taxation returns. 36 While the provision of statistical information on sentencing patterns may be useful in discerning the range of sentences that have thus far been imposed for a particular offence, this Court has often stated that they must be used with care. The major guideposts, imposed by the statute, are the maximum sentence, any standard non-parole period and the general principles of sentencing as espoused, particularly, in relation to the particular offences for which sentence is being imposed. The use of statistics as a measure of the appropriateness of the sentence has the effect of creating a self-fulfilling range of sentences, which may bear little relationship to the maximum sentence imposed by the legislature. 37 While a comparison with statistics is a legitimate and potentially useful exercise, it does not constrain the proper application of sentencing principles nor inhibit the flexibility that inheres in the sentencing process. The use of statistics promotes consistency in sentencing, but a sentencing judge is not constrained by those statistics. 38 This Court in R v Bloomfield (1998) 44 NSWLR 734 summarised the effect of a number of decisions from various jurisdictions in the following way: "(i) The sentence to be imposed depends on the facts of each case and for that reason bald statistics are of limited use. (ii) Statistics may be less useful than surveys of decided cases, which enable some detail of the specific circumstances to be set out for purposes of comparison. (iii) Caution needs to be exercised in using sentencing statistics, but they may be of assistance in ensuring consistency in sentencing. (iv) Statistics may provide an indication of general sentencing trends and standards. (v) Statistics may indicate an appropriate range, particularly where a significant majority or a small minority fall within a particular range. Also when a particular form of sentence such as imprisonment is more or less likely to have been imposed. (vi) Statistics may be useful in determining whether a sentence is manifestly excessive or manifestly inadequate. (vii) Statistics are least likely to be useful where the circumstances of the individual instances of the offence vary greatly, such as manslaughter. (viii) The larger the sample the more likely the statistics are likely to be useful." 39 Further, a comparison with statistics would then have to take into account both the fact that the sentencing judge was dealing with four offences and the range of criminal conduct to which section 29D applies. 40 More relevant is the reference to other judgements of this Court dealing with sentencing for similar criminal conduct. Two judgments, stressed by Mr Robertson or on his behalf, were El-Chaar v R [2007] NSWCCA 16 and R v Ronen (2006) 161 A Crim R 300; [2006] NSWCCA 123. In El-Chaar, this Court dealt with an appeal against the sentence imposed for 13 offences committed over 12 months involving amounts totalling $1,066,020. The Court granted leave to appeal and dismissed the appeal against sentence, which were sentences having an overall effect of a total period of imprisonment of eight years with a non-parole period of five years. Are Tax Penalties a Deterrent and a Factor in Comparing Sentences? 41 In Ronen, leave to appeal was granted but the appeal was dismissed, as was the cross-appeal by the Crown. Ronen involved the non-declaration of income of between $15 million and $17 million. Each offender, in that case, was sentenced to a total sentence of imprisonment of eight years and six months with a non-parole period of four years and six months. Further, significant amounts of penalties were imposed by the ATO over and above the criminal sentences imposed by the courts. 42 Mr Robertson submits that the fact that penalties outside the criminal justice system were imposed is irrelevant to the sentencing process in which the Court is engaged. I reject that. 43 The imposition of penalties under the taxation or revenue legislation is itself intended to be a deterrent to the conduct in question (see: R v Lyon (1906) 3 CLR 770; Vogel v Anderson (1967) 120 CLR 157 at 164, 168) and may, depending on circumstances, be a factor to which courts may have regard in imposing criminal sanctions. Conclusion 44 The sentences imposed on Mr Robertson, when compared to the sentences in El-Chaar and Ronen, are not so excessive as to warrant interference, whether or not account is taken in the other judgments of penalty tax payments. These are complicated offences that required significant preplanning over an extended period. The criminal conduct involved the exercise of skill and an intention, on each separate occasion, to be involved in criminal conduct. The sentences imposed are neither identifiably or manifestly excessive. These grounds also fail. 45 Further the structure of the sentences, with total concurrence, results in an overall structure less severe than if there had been partial accumulation. 46 None of the grounds advanced by Mr Robertson warrants interference by this Court on appeal. Subject to the conceded correction noted above, the sentences disclose no error, either identifiable or manifest, in the exercise of the discretion of the sentencing judge. 47 I propose the following orders to correct the error discovered: (i) Leave to appeal be granted; (ii) Appeal be granted only to the following extent: The sentence imposed on 22 September 2006 be quashed and in lieu thereof Mr Robertson be sentenced as follows: (a) Count 1 : Defrauding the Commonwealth: a period of imprisonment of five years and six months commencing 22 September 2006 and concluding 21 March 2012; (b) Count 2 : Attempting to defraud the Commonwealth: a period of imprisonment of three years and six months commencing on 22 March 2008 and concluding on 21 September 2011; (c) The two offences contained in s. 16BA Schedule have been taken into account in sentencing on Count 1; (d) Non-parole period: an overall non-parole period of three years and six months commencing 22 September 2006 and concluding on 21 March 2010. ********** 13/11/2007 - [32] The word "(sic)" inserted after 21 March 2012; [41] The words "million" added after $15 and $17. - Paragraph(s) 32, 41 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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