Heath v Regina

1. [1]

   SIMPSON J: I agree with McCallum J.

2. [2]

   JOHNSON J: I agree with McCallum J.

3. [3]

   McCALLUM J: Nigel Heath seeks leave to appeal against the sentences imposed upon him after he pleaded guilty in the District Court to two market misconduct offences brought against him by the Commonwealth Director of Public Prosecutions (in effect, on behalf of the Australian Securities and Investments Commission). The first was an offence of market manipulation contrary to s 1041A(c) of the Corporations Act 2001 (Cth). The second was a matched trade offence contrary to s 1041B(1)(b) of the Act.

4. [4]

   Section 1041A(c) prohibits the carrying out of transactions that have or are likely to have the effect of creating an artificial price for trading in financial products on a financial market. Section 1041B(1)(b) prohibits acts that have or are likely to have the effect of creating or causing the creation of a false or misleading appearance with respect to the price for trading in financial products in a financial market. The penalty (stated in schedule 3 to the Act) for each offence is imprisonment for 10 years or a fine determined according to the greater of the number of penalty units specified in the schedule or, if ascertainable, three times the total value of the benefits obtained (or both).

5. [5]

   The applicant was sentenced by King SC DCJ as follows:

   1. (1)

      for the matched trade offence, to a term of imprisonment of 18 months commencing on 25 September 2015 and expiring on 24 March 2017;

   2. (2)

      for the market manipulation offence, to a term of imprisonment of 2 years commencing 3 months later, that is, on 25 December 2015 and expiring on 24 December 2017.

6. [6]

   The judge directed that, after serving 9 months, the applicant be released on a recognisance release order in the sum of $10,000 without surety to be of good behaviour for a period of 18 months.

Proceedings on sentence

1. [7]

   The facts relied upon by the Crown at the proceedings on sentence were proved by the tender of an agreed statement of facts. In addition, ASIC provided a statement prepared by one of its lawyers setting out the extent of the applicant’s co-operation in the investigation (which was considerable).

2. [8]

   The defence material included a lengthy affidavit sworn by the applicant together with two affidavits sworn by his wife, two medical reports and five character references. Mrs Heath’s affidavit addressed matters relating to a serious health condition suffered by their daughter which was relied upon to establish exceptional circumstances of family hardship. The parties also provided lengthy written submissions to the sentencing judge together with schedules of sentences imposed in other market misconduct cases.

3. [9]

   The Crown did not require the applicant or any of his witnesses for cross-examination.

Circumstances of the offences

1. [10]

   The agreed statement of facts stated that the applicant has traded in shares in public listed companies for over 20 years. He had previously worked as a solicitor, holding a Bachelor of Laws and a Master of Laws. During the period of the offending, trading in shares and contracts for difference (“CFDs”) was his primary source of income. The agreed facts explained CFDs as follows:

2. [11]

   At the commencement of the offending the applicant had (inter alia) a share and CFD portfolio worth approximately $1.4 million with net equity of about $850,000 and had recently sold a family home for $7.20 million with net equity of about $4.7 million.

3. [12]

   As at the time of the proceedings on sentence, the applicant traded through nine separate online trading accounts with two brokers (five equities trading accounts with ETRADE Australia Securities Limited and four CFD trading accounts with First Prudential Markets Pty Ltd). It was noted in the agreed facts that ASIC did not assert the accounts were opened for any improper purpose but that the commission of the offences was facilitated by having multiple accounts. Some of the accounts were held jointly with or in the name of the applicant’s wife or various companies but it was common ground that the applicant carried out all transactions on those accounts.

4. [13]

   In about 2002 the applicant began buying shares in Petsec Energy Limited (known as PSA), an Australian company engaged in oil and gas exploration and production. In about 2012 he also began buying contracts for difference (“CFDs”) relating to those shares. Shares in Petsec have traded on the Australian Stock Exchange (“ASX”) since 1980. The applicant was described in the statement of facts as “a long term accumulator” of shares in Petsec.

5. [14]

   The agreed facts were that, during the period of offending, the applicant acquired larger volumes of shares and CFDs in Petsec, peaking in October 2012, when he held approximately 2.7 million shares and approximately 2.3 million CFDs with an approximate market value of $673,386.

6. [15]

   The market manipulation offence was described in the statement of facts in the following terms:

7. [16]

   The 138 transactions were summarised in schedule 1 to the statement of facts. Each was an online purchase of shares or CFDs through one of the two brokers. The statement of facts did not provide any context to allow an assessment of the significance of those trades. It did not say whether the shares were thinly traded or provide any detail as to the frequency of trades in those shares. Nor did it explain whether, in each instance, the applicant’s bid must have matched an offer to sell at the same price or whether the ASX system allowed the match of a bid at a specified price with an offer to sell at a lower price.

8. [17]

   The matched trade offence related primarily to Petsec but also to shares and CFDs in a small number of other public listed companies. That offence was described in the agreed facts as follows:

9. [18]

   The 30 transactions were summarised in schedule 2 to the statement of facts.

10. [19]

    The elements of Commonwealth offences are addressed in chapter 1 of the Criminal Code. The Code specifies that an offence consists of physical elements and fault elements. A physical element can be conduct, a result or a circumstance in which conduct or a result of conduct occurs. The market manipulation offence had two physical elements: a conduct element (carrying out the transactions) and a result element (the transactions had the effect of creating an artificial price for trading in the ordinary shares of PSA on the ASX). The fault element for the result element is recklessness (see clause 5.6(2) of the Code) but that element is able to be satisfied by proof of intention, knowledge or recklessness (see clause 5.4(4) of the Code). The agreed facts did not specify which was relied upon in the present case.

11. [20]

    The physical elements of the matched trade offence were, similarly, the conduct of carrying out the transactions and a result (that the transactions had the effect of creating or causing the creation of “a false or misleading appearance with respect to the price” for trading in Petsec and other shares). As with the market manipulation offence, the fault element was recklessness but proof of intention, knowledge or recklessness satisfied that element. In respect of the matched trade offence, it was an agreed fact (recorded at paragraph 38 of the statement of facts) that the applicant carried out the matched trades with the intention of creating a false or misleading appearance with respect to the price for trading in the relevant shares. In other words, the fault element for the “result” element was intention. That issue is considered further below.

12. [21]

    It would have been preferable if the agreed facts had set out the elements of each offence at the outset of the document and clearly particularised the agreed proof of each element. As to the market manipulation offence, to the extent that the statement of facts addressed that issue, it tended to conflate the physical and fault elements of the “result” element of the offence. For example, paragraph 25 of the statement said (emphasis added):

13. [22]

    That paragraph makes it clear that the applicant acknowledged that his dominant purpose was to maintain or increase the price of the shares and that his trading had that effect. What it does not do is explain or evaluate the extent to which that was achieved.

14. [23]

    Similarly, paragraph 22 of the agreed facts said (emphasis added):

15. [24]

    A similar comment may be made about that paragraph. It does not explain the duration or significance of the impact of the applicant’s trading on the share price in the context of the overall volume and frequency of trading in the shares or by reference to the range of share price throughout the relevant period. The actual effect of the transactions on the market was an important part of the assessment of objective gravity.

16. [25]

    The elements of the offences are of course admitted by the applicant’s plea of guilty. Each physical element is admitted, in terms, in the agreed facts. I do not seek to traverse those matters. My point is to observe that, apart from some arithmetic analysis of the transactions primarily by reference to the circumstance of the applicant (considered below), the agreed facts provided little by way of analysis or explanation of the nature or significance of the effect of the applicant’s trading on the market (as distinct from his purpose).

17. [26]

    The passage of the agreed facts set out above proved that, to the extent that the applicant’s transactions achieved the object of maintaining or increasing the share price, that would allow him to avoid margin calls; avoid having to contribute more funds to his CFD trading accounts; “and/or” increase the free equity in his CFD trading accounts, “which he could use to trade in shares, or maintain or take other CFD positions”.

18. [27]

    Considerable detail was provided in relation to those matters, including dollar sums attributed to the notional gain obtained as a result of the applicant’s trading. It is appropriate to set out the relevant passages of the statement of facts in full:

19. [28]

    The statement of facts also provided a detailed explanation as to how the applicant achieved an impact on price, as follows:

20. [29]

    Similar detail was provided in respect of the matched trade offence, as follows:

21. [30]

    The applicant’s affidavit explained that, whatever he may have been attempting to achieve through his trading, it in fact achieved “no lasting support for PSA whatsoever”. He explained why he had engaged in such a futile exercise:

22. [31]

    The Crown did not contest that evidence.

23. [32]

    The ASIC statement relating to the applicant’s co-operation reveals that, immediately after being contacted by ASIC in relation to its investigation of the offences, the applicant participated in an examination under s 19 of the Australian Securities and Investment Commission Act 2001 (Cth) during which he made “full and frank admissions about the offending referred to in the statement of facts”. The transcript of the s 19 examination was not before the sentencing judge and is not before this Court. The applicant made a deliberate, informed decision not to claim the protection against self-incrimination, with the result that the content of the examination was admissible against him in any subsequent proceedings including criminal proceedings.

24. [33]

    The statement of co-operation records that the applicant made admissions that his transactions “had the effect of maintaining or increasing the price of securities on the ASX” and that he carried out transactions between accounts controlled by him with the intention of maintaining or increasing the price of securities on the ASX.

25. [34]

    The applicant subsequently entered into negotiations with ASIC with a view to formally admitting and pleading guilty to “appropriate charges”. During that period, the applicant was represented by a solicitor who worked co-operatively with ASIC to settle the statement of facts.

Grounds of appeal

1. [35]

   The applicant relies on 7 grounds of appeal, as follows:

   1. (1)

      The Trial Judge erred by rejecting the undisputed and unchallenged evidence regarding Mr Heath’s lack of knowledge of criminality.

   2. (2)

      The Trial Judge erred by rejecting the agreed evidence of Mr Heath regarding his motivation to provide price support to the Petsec stock.

   3. (3)

      The Trial Judge erred by finding that Mr Heath obtained and/or intended to obtain a financial benefit.

   4. (4)

      The Trial Judge erred by failing to consider all the factors relevant to the objective gravity of the offences.

   5. (5)

      The Trial Judge erred by failing to find exceptional circumstances concerning family hardship.

   6. (6)

      The Trial Judge erred by finding that there was inconsistency between Mr Heath’s plea of guilty and Mr Heath’s evidence.

   7. (7)

      The sentence imposed was manifestly excessive.

Ground 1

1. [36]

   The first ground of appeal is:

2. [37]

   The statement of facts said:

3. [38]

   As noted by Johnson J during the hearing of this appeal, the agreed fact was ambiguous by reason of the adoption of the unfortunate formulation “knew or ought to have known”. The appellant’s affidavit relied upon at the proceedings on sentence accepted what he ought to have known but repeatedly asserted that he did not in fact know that his conduct was unlawful. The affidavit explained in detail the applicant’s education and background in trading. In my view, his account was not inherently implausible.

4. [39]

   As already noted, the Crown did not seek to cross examine the applicant. His affidavit accordingly stood as unchallenged evidence in the proceedings.

5. [40]

   The applicant accepts, correctly, that a sentencing court is not obliged to accept unchallenged evidence. However, it was submitted that, where the Court is considering rejecting unchallenged evidence (for example on the basis that it is inherently improbable), the witness must be afforded an opportunity to address that proposition. The applicant submitted that, if that proposition is not put to a witness by the opposing party, it is the duty of the judge to put the assertion to the witness before rejecting the evidence.

6. [41]

   The authority cited by the applicant for that proposition is a civil case: Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336 at 344-5. The passage cited was from the judgment of Kirby J, who said:

7. [42]

   A similar principle has been recognised in the context of criminal proceedings. In O’Neil-Shaw v R [2010] NSWCCA 42, this Court said (at [27] per Basten JA; Howie and Johnson JJ agreeing at [40] and [41]; and see Johnson J’s further remarks at [50]-[51]):

8. [43]

   Some caution should be applied in the application of authorities in civil cases to the task of fact-finding in sentence proceedings. In civil proceedings, the rules of engagement are determined by the parties according to their pleadings; in criminal proceedings, broader interests are invoked. In sentencing proceedings, the judge is not obliged “passively, and unquestioningly, to accept facts as the basis for sentencing which are presented by the prosecution and/or the accused”. The judge’s sentencing discretion must be exercised in the public interest: Chow v Director of Public Prosecutions (1992) 28 NSWLR 593 at 606; approved in O’Neil-Shaw at [23].

9. [44]

   It must accordingly be accepted that, in the criminal context, there will be occasions when it will not be appropriate for the sentencing judge to let a matter pass as an accepted fact merely on the basis that the Crown has chosen not to challenge a witness about that fact. Conversely, however, the stakes are high in the case of criminal proceedings. Where a person faces the prospect of a custodial sentence, the content of the duty of procedural fairness is not less than in the case of a civil claim.

10. [45]

    The applicant’s affidavit setting out his evidence at the proceedings on sentence included repeated references to his absence of knowledge that the conduct with which he was charged was unlawful. At paragraph 56 of the affidavit, he said:

11. [46]

    There were several other references to the applicant’s ignorance of any law prohibiting his conduct.

12. [47]

    In his reasons for sentence, the sentencing judge said:

13. [48]

    The statement that the applicant “did not give evidence on sentence” is not correct. His affidavit was admitted in the defence case at the proceedings on sentence. The judge’s remarks must be taken to refer to the fact that the applicant did not go into the witness box. However, that was due to the election of the Crown not to require him for cross-examination. It was not a situation where an offender had chosen not to expose himself to cross-examination at the proceedings on sentence.

14. [49]

    There was some debate in the submissions on appeal as to the significance of that finding. The Crown submitted that the judge’s rejection of the undisputed and unchallenged evidence regarding the applicant’s lack of knowledge of criminality was not relied upon by his Honour as an aggravating factor in itself but was rather only the rejection of a matter offered in mitigation. However the finding is characterised, it is clear in my view that it informed, and was informed by, his Honour’s assessment of the objective seriousness of the offence. In particular, my assessment of the evidence and the judge’s reasons has persuaded me that his Honour’s rejection of the applicant’s evidence as to his lack of knowledge of criminality was informed by a misapprehension as to the actual impact of the applicant’s trading and the nature of the benefit obtained (considered in detail below).

15. [50]

    In the circumstances, I do not think it was open to the sentencing judge, without raising the matter, to reject the applicant’s evidence that he did not understand that what he was doing was in fact committing offences. The more difficult question is to determine what flows from that conclusion. The question whether it was open to a sentencing court to make a particular finding is ordinarily determined by reference to an assessment of the evidence before that court. The issue raised in the present appeal is not so much a question of the availability of the finding as of a denial of procedural fairness. Ordinarily, the appropriate course would be to remit the proceedings to the sentencing court for determination according to law. The difficulty in the present case is that to adopt that course would defeat the object of the appeal and visit considerable hardship on the applicant. The applicant was sentenced to a term of imprisonment commencing on 25 September 2015. By the time this appeal was heard on 2 February 2016, he had already served more than four months of his term of imprisonment.

16. [51]

    As already noted, the applicant had adduced evidence to support a submission that there were exceptional circumstances of family hardship which warranted a more lenient sentence (the judge’s treatment of that issue is the subject of ground 5). The same circumstances prompted Mr Thangaraj SC to submit on behalf of the applicant that a remitter of the proceedings would be a worse result (for the family) than dismissing the appeal. In my view, there is force in that submission. Even if the applicant were granted bail pending the remittal of the proceedings for redetermination in the District Court, and even if that Court, with all the pressure of its workload, were able to determine the matter promptly, the stress and delay inevitably involved in that course would defeat the very object of this appeal and so suffer this Court to become the instrument of an injustice: cf Green v R; Quinn v R [2011] HCA 49; 244 CLR 462 at [4].

17. [52]

    Before proceeding to resolve that dilemma, it is appropriate to consider the remaining grounds of appeal relied upon by the applicant.

Objective seriousness of the offences: grounds 2, 3, 4 and 6

1. [53]

   There is a degree of overlap in grounds 2, 3, 4 and 6. It is appropriate to consider the issues raised by those grounds together. They are:

2. [54]

   The judge set out the agreed statement of facts in full in his reasons for decision. His Honour then referred to the statement of co-operation, acknowledging that the applicant’s co-operation had significantly assisted ASIC to resolve the matter in an expeditious and less costly manner and accepting that the co-operation was also relevant to the issue of contrition. His Honour concluded, “nonetheless, offences such as these are serious offences”.

3. [55]

   His Honour did not, in that section of the judgment, identify any specific aspect of the offending in this case or analyse the relative seriousness of these offences by reference to the range of conduct that might fall within the two sections.

4. [56]

   The judge then turned to consider the subjective case, setting out a careful analysis of the evidence on that issue. His Honour then returned to the question of the kind of conduct involved in such offences, saying (at ROS 27):

5. [57]

   The passage from Khoo cited by his Honour quoted a statement made by me in the matter of R v Glynatsis [2013] NSWCCA 131; 230 A Crim R 99 at [79]. Khoo and Glynatsis were each cases of insider trading in which the objective seriousness of the offending was plainly higher than in the present case.

6. [58]

   The judge’s observation that the final sentence of that quote (“that insider traders should expect to go to gaol”) is “just as applicable to this matter as it is to insider trading” suggests that his Honour equated the seriousness of the applicant’s conduct with that of the offenders in Khoo and Glynatsis. It was against that premise that his Honour proceeded to assess the contents of the applicant’s affidavit. After stating that he did not accept that the applicant did not understand that what he was doing was in fact committing offences (in the passage set out above), the judge continued:

7. [59]

   As to the applicant’s motive, the judge said:

8. [60]

   As contended by ground 2, the finding as to motive was inconsistent or at least in tension with the agreed fact (at paragraph 24 of the statement of facts) that Mr Heath considered himself something of a “champion” for PSA as a stock and that this was his “main motivation” for providing price support for PSA across the relevant period.

9. [61]

   The judge’s finding as to motive appears, in turn, to have been informed by his Honour’s assessment of the benefit or potential benefit achieved by the applicant through his trading. The applicant’s evidence was that his trading achieved no lasting price impact on the relevant stocks; that, at the very most, his trading had a short-lived impact on the market and that he did not in fact take advantage of any short term price impact which his trading may have caused. He also said that his debt to asset ratio was never more than 30 to 40% of the net present value of the assets and that he never had a margin call on any of his accounts.

10. [62]

    The statement of facts does not address every trade in detail. As set out above, the trades were summarised in a schedule, the statement offering “a particularly obvious and serious example” of the market manipulation offence in the trading on 24 July 2013. That example illustrates the fleeting impact of the applicant’s trading. In hindsight, this aspect of the offending could have been made clearer to the sentencing judge. The judge was presented with a vast amount of material which it was simply impractical for his Honour to absorb within the time available to the Court on the day of the hearing.

11. [63]

    In the result, I am persuaded that the judge overlooked or misapprehended the fleeting impact of the applicant’s trading on the market and the unlikelihood that he would in fact obtain any lasting financial benefit as a result of his trading. That misapprehension in turn informed his Honour’s assessment of several other aspects of the objective seriousness of the offences. As already noted, his Honour was presented with a significant amount of complex material in which the fleeting nature of the impact of the trading may well have been obscured by the detail of other aspects of the offending conduct. Paragraphs 26 and 27 of the agreed facts provided an arithmetic analysis of the percentage increase in price, the volume and value of shares traded on each occasion and the resulting impact on the applicant’s free equity. The level of detail provided on those issues was apt to distract attention from the futility of the applicant’s trading. The “result” element of the market manipulation offence (that the transactions carried out by the applicant had the effect of creating an artificial price for trading in the ordinary shares of Petsec on the Australian Stock Exchange) was satisfied by the agreed fact that the applicant’s trades had that effect. It was also an agreed fact that the applicant undertook each of those transactions “for the sole or dominant purpose of maintaining or increasing the price” of those shares. But, upon analysis, that purpose could never have been achieved by trading at the volume and frequency of the applicant’s trading. An appreciation of that important aspect of the offending was essential for the proper assessment of the matters addressed in the applicant’s affidavit and rejected by his Honour.

12. [64]

    In rejecting the applicant’s affidavit, the judge said:

13. [65]

    The applicant relied upon that passage of the judgment to support the contention made by ground 6 that the judge erred by finding there was an inconsistency between the applicant’s plea of guilty and his evidence. Whether or not his Honour made a finding in those terms, his scepticism appears to have been misplaced.

14. [66]

    The judge did not identify what he was referring to as the “obvious consequences” of the market manipulation offence. By reference to the material that was before his Honour, that can only have been a reference to the actual impact of the transactions on the share price or the actual financial benefit obtained. In fact, according to the matters explained in the applicant’s affidavit, the consequence of his trading was that it would temporarily maintain or increase the share price but would have no lasting effect. Any consequential impact on the value of the applicant’s equities must have been equally transitory. This was not a case in which the snapshot of a ramped up price was of utility to the applicant for a different purpose or where the share price at any particular time affected some third party obligation (cf Fame Decorator Agencies Pty Ltd v Jeffries Industries Ltd (1998) 28 ACSR 58).

15. [67]

    In my respectful opinion, it is tolerably clear that the sentencing judge was under the misapprehension that the increase in the applicant’s free equity and the increase in the market value of his share holdings identified in the statement of facts was a lasting benefit of real value to the applicant, reflecting a lasting improvement in his net worth (which is effectively the point raise by ground 3).

16. [68]

    An assessment of the matched trade offence is more complex. According to the statement of facts, it was an agreed fact that the applicant undertook those transactions “with the intention of creating a false or misleading appearance with respect to the price for trading in [the relevant securities] for the reasons identified in paragraphs 23 and 24 above, and having the effect identified in paragraph 22 above”. In other words, the fault element specified for the physical “result” element of the offence was intention.

17. [69]

    In the present appeal, it was submitted that the judge overlooked an important aspect of that offence, which was that there were also some trades effected at below market price. There does not appear to have been evidence of that fact at the proceedings on sentence – it was a matter stated from the bar table in submissions (T16.23: the transcript says “at the low market price” but plainly should read “at below market price”). That was said to be a significant factor in the assessment of the applicant’s motive for carrying out those transactions.

18. [70]

    In his affidavit, the applicant said:

19. [71]

    In his consideration of that evidence, the judge correctly constrained himself by reference to the agreed fact as to the applicant’s intention. His Honour said:

20. [72]

    On the strength of the agreed facts, that is an unexceptionable description of the nature of that offence. However, the judge’s other remarks as to the “consequences” of the applicant’s conduct (considered above) were made with reference to both offences, indicating that his Honour overlooked the fleeting impact of the effect on price in assessing the matched trade offence as well as in his assessment of the market manipulation offence.

21. [73]

    For those reasons, I am persuaded that the sentencing judge misapprehended the objective seriousness of both offences. While the foregoing discussion addresses a number of the applicant’s grounds, it is enough to express the conclusion that ground 4 is made out. In the circumstances, it is not necessary to address grounds 5 and 7.

22. [74]

    Leaving aside the complication created by the success of ground 1, it would follow from the success of ground 4 that this Court must exercise the sentencing discretion afresh.

23. [75]

    The difficulty is to determine the proper approach to that task, having regard to the applicant’s success on ground 1. For the reasons already explained, I do not think this Court should remit the proceedings to the District Court to make further findings of fact. The interests of justice require, in the circumstances, that this Court should rather proceed to determine the appropriate sentence. Ordinarily this Court would re-sentence the applicant on the strength of the findings of fact made below but that could not fairly include the finding as to knowledge of criminality reached by the sentencing judge without there being afforded to the applicant an opportunity to address the judge’s concerns – that would be an affront to justice.

24. [76]

    There is no perfect solution to this issue. In the circumstances, this Court in my view can and should take a practical course that accords with the interests of justice. For my part, the resolution is to be found in my analysis of ground 4. Once it is understood that the impact of the applicant’s trading was fleeting and that the applicant did not in fact capitalise on the transitory benefits he achieved, it follows, in my view, that the applicant’s evidence as to his knowledge of criminality was not inherently improbable or inconsistent with the agreed facts or the plea of guilty. Accordingly, in my view, the appropriate course is for this Court to re-sentence the applicant on the strength of its own assessment of that evidence and there is no occasion for further hearing, either in this Court or in the Court below.

25. [77]

    My consideration of the applicant’s affidavit has led me to conclude that, rather than engaging in a dishonest campaign of price manipulation which he must have appreciated was unlawful, the applicant’s trading was manic, obsessive and ultimately misconceived. By his plea of guilty, he accepted that the effect of his trading was to create a price that was “artificial”. However, the evidence also establishes that his purpose was to maintain or achieve the price he thought the stock was worth, not to ramp it up to a price he believed to be beyond its worth for personal gain. I would accept the applicant’s evidence on that issue, unchallenged as it was by the Crown at the proceedings on sentence.

26. [78]

    My analysis of the evidence leads me to conclude that the objective seriousness of the market manipulation offence was significantly lower than the sentencing judge assessed it to be. The seriousness of the matched trade offence was higher, since it was admitted in respect of that offence that the applicant intended to create a false and misleading appearance with respect to the price of the relevant securities. In my view, the sentence imposed for that offence should stand, notwithstanding my conclusions set out above.

27. [79]

    Although it has not been necessary to consider ground 5, the material relied upon concerning family hardship must be considered on re-sentence. Section 16A(2)(p) of the Crimes Act 1914 (Cth) requires the Court to have regard to “the probable effect that any sentence or order under consideration would have on any of the person's family or dependants”. On the present state of the law, the Court must approach that issue on the basis that the degree of family hardship must be shown to be “exceptional” before it can be given any substantial weight: R v Togias [2001] NSWCCA 522; 127 A Crim R 23 at [16] per Spigelman CJ; R v Hinton [2001] NSWCCA 405; 134 A Crim R 286.

28. [80]

    The Crown accepted at the proceedings on sentence that the circumstances relied upon in the present case were capable of amounting to exceptional hardship. I am persuaded that exceptional hardship has been established. It is neither necessary nor desirable to descend into the detail provided in the evidence. In short, it establishes that the applicant’s daughter plainly needs intensive support from both her parents.

29. [81]

    At the time of the proceedings on sentence, the daughter was interstate. She is evidently an extremely talented woman. Unfortunately, she suffers from debilitating illnesses that are life-threatening. The evidence provided extensive detail about her condition and treatment. It is enough to record that her parents’ ongoing support remains critical to her wellbeing.

30. [82]

    The applicant’s other daughter is at school in Sydney where the family otherwise lives. She is now embarking on her HSC year. One of the features of the family circumstances relied upon at the proceedings on sentence was that it was necessary for one parent to be interstate to support the older daughter while the other remained in Sydney to support the daughter doing the HSC.

31. [83]

    The evidence on re-sentence established that, as feared, the applicant’s period of incarceration has seen a deterioration in the older daughter’s condition and she has, for the time being, had to postpone her studies. It would be open to her to return interstate to resume her studies in the middle of this year, if she is well enough. Those matters, in my view, amount to exceptional circumstances such as to warrant some consideration in determining the portion of the term of imprisonment which the applicant should serve before being released on a recognisance release order.

32. [84]

    In my view, based on my assessment of the objective circumstances of the offences and the applicant’s subjective circumstances, the sentences imposed in the District Court should be quashed and the following sentences imposed in substitution for them (the total term for the matched trade offence remains the same):

    1. (1)

       for the matched trade offence, to a term of imprisonment of 18 months commencing on 25 September 2015 and expiring on 24 March 2017;

    2. (2)

       for the market manipulation offence, to a term of imprisonment of 18 months commencing on 25 December 2015 and expiring on 24 June 2017.

33. [85]

    In my view, the period of 5 months already served by the applicant is an adequate reflection of the period of the sentence he should actually serve.

34. [86]

    The orders I propose are:

    1. (1)

       That leave to appeal be granted;

    2. (2)

       That the appeal be allowed;

    3. (3)

       That the sentences passed in the District Court be quashed and, in substitution therefor, that the applicant be sentenced as follows:

    4. (4)

       That the applicant be released today, 25 February 2016, on a recognisance release order in the sum of $10,000 without surety to be of good behaviour for a period ending on 24 June 2017.