Humphreys v R

1. [1]

   SIMPSON AJA: I agree with the orders proposed by Johnson J, for the reasons stated by his Honour.

2. [2]

   JOHNSON J: The Applicant, John Alexander Humphreys, seeks leave to appeal with respect to an aggregate sentence of imprisonment imposed at the Sydney District Court on 28 October 2016 for offences of recklessly dealing with proceeds of crime contrary to s.193B(3) Crimes Act 1900 (23 counts) and attempt to recklessly deal with proceeds of crime contrary to ss.193B(3) and 344A(1) Crimes Act 1900 (five counts).

The Offences, Aggregate Sentence and Indicative Sentences

1. [3]

   The Applicant stood trial before her Honour Judge Girdham SC and a jury between 9 March 2016 and 31 May 2016 with respect to these 28 counts. The jury found the Applicant guilty of each offence.

2. [4]

   Following a sentencing hearing between 23 and 27 September 2016, the Applicant was sentenced on 28 October 2016 to an aggregate term of imprisonment of nine years and two months, comprising a non-parole period of six years and three months commencing on 27 October 2016 and expiring 26 January 2023 with a balance of term of two years and 11 months commencing on 27 January 2023 and expiring on 26 December 2025.

3. [5]

   With respect to each of the 23 offences of recklessly dealing with proceeds of crime under s.193B(3) Crimes Act 1900, her Honour nominated an indicative sentence of imprisonment of five years. For each of the five offences of attempting to recklessly deal with proceeds of crime contrary to ss.193B(3) and 344A(1) Crimes Act 1900, her Honour nominated an indicative sentence of imprisonment for four years and six months.

4. [6]

   The maximum penalty for each of the 28 offences for which the Applicant was sentenced was imprisonment for 10 years.

Ground of Appeal

1. [7]

   By Notice of Application for Leave to Appeal filed on 25 October 2019, the Applicant relies upon a single ground of appeal which asserts that he has a justifiable sense of grievance having regard to disparity between the sentence imposed upon Richard Barnes (“Barnes”) by his Honour Judge Zahra SC on 14 December 2017 compared to the sentence imposed upon the Applicant by her Honour Judge Girdham SC on 28 October 2016.

An Extension of Time is Required

1. [8]

   A Notice of Intention to Appeal Against Conviction and Sentence was filed on behalf of the Applicant within time on 2 November 2016. Thereafter, the Registrar granted the Applicant a number of extensions until 22 October 2018. The Registrar refused further extensions after that time. The present application was filed on 25 October 2019.

2. [9]

   Section 10(1)(b) Criminal Appeal Act 1912 permits the Court to extend time for the bringing of an appeal which is otherwise out of time. In support of the application for an extension of time, the Applicant relies upon the affidavit of Monica Carmel McKenzie sworn 25 October 2019. Ms McKenzie states that the Applicant’s matter was transferred to her solicitors’ practice in May 2019. Thereafter, she took steps to gather materials before receiving a merit advice with respect to a sentence appeal only from counsel on 2 October 2019. Ms McKenzie was unaware as to why the Applicant’s previous legal representatives had been in the matter for so long without producing a merit advice.

3. [10]

   The discretionary power to extend the time limit in s.10(1)(b) Criminal Appeal Act 1912 constitutes legislative recognition that the interests of justice in a particular case may favour permitting an application for leave to appeal against sentence to be heard notwithstanding that it was not brought within time: Kentwell v The Queen (2014) 252 CLR 601; [2014] HCA 37 at [32]. The interests of justice will often pull in different directions and include consideration of the adverse effect on the community generally occasioned by reopening a concluded criminal proceeding: Kentwell v The Queen at [32]. The present application relates to sentence only. Relevant to the determination of the interests of justice on an application to extend time are the prospects of success of the ground of appeal should the extension be granted: Kentwell v The Queen at [33], [44].

4. [11]

   The interests of justice test to be applied on the present application requires attention to be given to the merits of the Applicant’s ground of appeal against the background of the substantial passage of time since Barnes was sentenced in December 2017.

5. [12]

   The Crown submitted that the appeal has no merit and that an extension of time should not be granted. It is appropriate to consider the merits of the application for the purpose of determining whether an extension of time should be granted.

Prosecution of the Applicant and his Co-Offenders

1. [13]

   The ground of appeal requires comparison of the aggregate sentence imposed upon the Applicant and that imposed by a different Judge at a later time upon a co-offender, Barnes.

2. [14]

   Four persons were charged and committed for trial for offences in relation to which the Applicant and Barnes were ultimately sentenced. The Applicant, Barnes, Daniel Kiss (“Kiss”) and Stephen Vickers (“Vickers”) were each committed for trial with the Crown intending, at that time, that they be tried together.

3. [15]

   Over the objection of the Crown, counts against Barnes and Vickers were severed from the indictment charging offences against the Applicant and Kiss. The counts against Vickers were later severed from the indictment charging him and Barnes because Vickers was unable to proceed with the scheduled trial for health reasons.

4. [16]

   On 9 March 2016, the Applicant and Kiss stood trial before Her Honour Judge Girdham SC and a jury upon an indictment which charged each of them with 23 counts of recklessly dealing with proceeds of crime and five counts of attempting to recklessly deal with proceeds of crime. At the conclusion of the trial on 31 May 2016, the Applicant and Kiss were found guilty on all counts. As mentioned earlier, the Applicant was sentenced on 28 October 2016 to an aggregate term of imprisonment of nine years and two months with a non-parole period of six years and three months. On the same date, Kiss was sentenced to an aggregate term of imprisonment of 11 years and two months with a non-parole of seven years and eight months.

5. [17]

   The trial of Barnes commenced before his Honour Judge Zahra SC and a jury on 5 April 2017 and concluded on 15 June 2017. Barnes was found guilty of all offences charged against him.

6. [18]

   The offences for which Barnes was found guilty were, in substance, identical to those for which the Applicant and Kiss had been convicted save for the important fact that the Crown proceeded against Barnes on the more serious charge of knowingly (as opposed to recklessly) dealing with proceeds of crime under s.193B(2) Crimes Act 1900 (23 counts) together with attempting to knowingly deal with proceeds of crime under ss.193B(2) and 344A(1) Crimes Act 1900 (five counts). The maximum penalty for each offence of which Barnes was found guilty was imprisonment for 15 years as opposed to the maximum penalty for the Applicant’s offences of imprisonment for 10 years for each offence.

7. [19]

   On 14 December 2017, his Honour Judge Zahra SC sentenced Barnes to an aggregate sentence of imprisonment of six years, comprising a non-parole period of four years commencing on 15 June 2017 and expiring on 14 June 2021 with a balance of term of two years commencing on 15 June 2021 and expiring on 14 June 2023.

8. [20]

   With respect to each of the 28 offences committed by Barnes, his Honour Judge Zahra SC nominated an indicative sentence of imprisonment of two years and six months.

9. [21]

   On 29 January 2018, Vickers pleaded guilty before his Honour Judge Scotting to seven counts of recklessly dealing with proceeds of crime under s.193B(3) Crimes Act 1900. On 8 June 2018, his Honour Judge Scotting sentenced Vickers to an aggregate sentence of imprisonment of three years with a non-parole period of 18 months.

10. [22]

    The Applicant’s ground of appeal is based upon a suggested legitimate sense of grievance arising from a comparison of his sentence with that imposed on Barnes. To determine this ground, it is necessary to consider findings made on sentence concerning the two men and any pertinent differences between their offences and their subjective circumstances.

Difference Between Charges Against the Applicant and Barnes

1. [23]

   The explanation for the difference between the charges may be found in the sentencing proceedings concerning Barnes (T59-60, 27 October 2017/AB429-430). This understanding was confirmed by comments made by his Honour Judge Zahra SC when sentencing Barnes (see [79] below).

2. [24]

   Judge Girdham SC had ruled at the trial of the Applicant and Kiss (by reference to s.4A Crimes Act 1900) that, in order to prove recklessness, the Crown had to prove that each accused had actual knowledge that the money was proceeds of crime and the jury was so directed (ROS6 at [55] below). During the sentencing proceedings for Barnes, the Crown acknowledged that, after the ruling made at the trial of the Applicant and Kiss, the Crown took the view that the proper charges to be brought against Barnes were charges involving knowledge so that an ex officio indictment was filed charging s.193B(2) offences against Barnes.

Facts of Offences

1. [25]

   A 55-page document entitled “Crown Summary of Evidence at Trial” was tendered at the sentencing proceedings for the Applicant. This document was accepted by the Applicant as “a fair summary of some of the more pertinent evidence in the trial”. However, there was some dispute between the parties as to the extent of the Applicant’s role and the extent of the reward that he received.

2. [26]

   References to sentencing remarks in the following narrative relate to the Applicant (and not Barnes) unless otherwise indicated.

3. [27]

   In summary, the Applicant, together with Kiss, Barnes and Vickers participated in a sophisticated scheme to defraud the Commonwealth Bank of Australia (“CBA”) by means of fraudulent loan applications. The money stolen from the CBA by means of the fraud was the proceeds of crime, the subject of each of the counts on the indictment. The scheme lasted for eight months between August 2008 and early April 2009 until it was discovered by the CBA. The total amount of money advanced on account of the fraudulent loan applications was $4,915,100.00. As a result of the scheme, the CBA suffered a loss of $4,770,500.00 (ROS3).

4. [28]

   The scheme involved the submission of loan applications to the CBA in the names of fictitious persons and of companies with fictitious directors. On each occasion, the title to land at various locations in far and mid-west New South Wales was submitted to the CBA as security for the loans. However, the stated values of the land were falsely and grossly inflated. The land titles were obtained by Kiss by unknown means and he was never the registered proprietor of the lands. The values supplied in the applications ranged from between $245,000.00 and $288,000.00. Funds advanced were between $195,000.00 and $230,000.00. The blocks of land used as security had been sold off at auction by local councils for unpaid rates for prices ranging from $100.00 to $10,250.00.

5. [29]

   Counts 1-23 related to 33 separate loans in respect of 23 different properties. In some cases, more than one loan was raised against an individual property.

6. [30]

   Counts 24-28 related to five further applications to a total of around $1 million that were never approved because the CBA discovered the fraudulent scheme. Each of these counts represented a different property.

7. [31]

   Thirteen loan applications relating to Counts 1-10 were in the names of fictitious persons with surnames Chang, Mitsos, Karas and Thanos.

8. [32]

   Twenty loan applications relating to Counts 11-23 were in the name of three companies, Vinton Holdings Pty Limited, Davidgrafik Pty Limited and Alexwells Holdings Pty Limited (with fictitious persons nominated as the directors and personal guarantors of the loans).

9. [33]

   Five loan applications relating to Counts 24-28 were in the name Alexwells Holdings Pty Limited.

10. [34]

    It was not in issue at trial that the loan funds obtained from the CBA were the proceeds of the crime of dishonestly obtaining a benefit by deception. In the case of each of the Applicant and Kiss, and Barnes at his trial in 2017, the trial was defended on the issue of knowledge.

11. [35]

    The scheme involved the use of multiple forged and fraudulent documents including forged council rate notices and forged identity documents. Her Honour Judge Girdham SC found that the Applicant’s offences attracted the aggravating factor of being 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 …” (ROS29).

12. [36]

    In determining sentence, each of her Honour Judge Girdham SC and his Honour Judge Zahra SC considered the role of the various offenders and rewards received by them as a result of their criminal conduct.

13. [37]

    It was the Crown case that Kiss conceived the plan. He provided the land titles and received most of the benefit from the scheme. Both sentencing Judges found that Kiss was at the top of the criminal enterprise.

14. [38]

    The role of Vickers was to prepare and supply many of the documents used in the application process.

15. [39]

    Barnes had worked for the CBA for several years and had acquired knowledge about the bank’s systems and procedures which he utilised in committing the offences. At the time of the offences, Barnes was a mobile lender still employed by the CBA. His role was to manipulate the CBA’s processes in order to ensure that the CBA would never have the land independently valued and he essentially took steps to ensure that the loans would be approved. These included falsely representing that the CBA had an existing valuation of the relevant land and ensuring that the loans were 80% or less of the valuation. These steps ensured that the CBA would not request an independent valuation as a condition of approving the loan.

16. [40]

    At the time of the offences, the Applicant was a self-employed financial planner. He had undertaken tertiary studies and obtained a Bachelor’s Degree in Business and Accounting. He was a certified public accountant. His role was to act as a conduit between Kiss on the one hand and Barnes on the other. He would receive documentation from Vickers and forward it to Barnes. However, he was also involved in the application process beyond merely handing documents to Barnes. Evidence of this was found largely in documents seized from the Applicant’s home when police executed a search warrant there.

17. [41]

    Particular aspects concerning the Applicant’s role in the criminal scheme included the following.

18. [42]

    Firstly, most of the money stolen from the CBA was deposited into the Applicant’s Viridian Line of Credit account in the first instance. The CBA records show that a total of $2,929,442.29 in loan monies were transferred directly to the Applicant’s Viridian Line of Credit account. Two further amounts totalling just over $387,000.00 were also transferred indirectly into the same account. In total, $3,316,719.09 passed through the Applicant’s Viridian Line of Credit account. He was not the ultimate beneficiary of most of that money, but it was his job to disperse the money to his co-offenders and himself.

19. [43]

    Secondly, telephone records show that during the period of the offending, there were close to 1,500 communications between the Applicant and Kiss, 513 communications between the Applicant and Barnes and no communications between Barnes and Kiss. Barnes gave evidence that he had never met Kiss. However, his Honour Judge Zahra SC placed little weight on the fact that Barnes had no connection to Kiss because they were both nevertheless part of the same joint criminal enterprise.

20. [44]

    Thirdly, although the properties purchased were largely for the benefit of Kiss, the purchases were made in the name of shelf companies established by the Applicant. The Applicant was involved in instructing his solicitor, Peter Aked, to set up company trusts for the benefit of Kiss to make the relevant purchases. Costs Agreements show that Mr Aked was acting for both the Applicant and Kiss. The Applicant later lied to Mr Aked, who queried the source of the money that had been used to buy the properties after the CBA raised concerns about the Applicant’s Viridian Line of Credit account.

21. [45]

    Fourthly, the material seized under search warrant from the Applicant’s home included copies of some of the fraudulent documents and handwritten notes regarding discussions with Kiss about borrowing money to purchase properties. This included an email in which the Applicant had asked Kiss to chase up Vickers as Barnes had arrived to take some files, but they had not yet been delivered.

22. [46]

    Fifthly, the Applicant travelled to the United States of America with Kiss and they met with real estate agents there. Notes about this made by the Applicant were found in documents seized from the Applicant’s home. The Applicant had a folder of real estate listings from the United States that he gave to police.

23. [47]

    Sixthly, two items seized from the Applicant’s house indicated that the Applicant advised Kiss to start buying properties “in trust or other name” and spoke of the need to make sure that Barnes was “protected and keep our options open there without risk”. The Applicant also suggested that in relation to the “next 9 or so going through”, one or two be valued.

24. [48]

    Seventhly, police found on the Applicant’s hard drive what were found to be detailed “ongoing reconciliation documents during the period of the loan activity”. They were detailed records of where the illegally obtained money had been disbursed. Banking records show that the transactions recorded in those documents were real.

25. [49]

    Her Honour Judge Girdham SC was unable to make a precise finding concerning the benefits which the Applicant received from his involvement in the scheme. The difficulty in working out precisely what the Applicant received from the scheme arose as most of the money defrauded from the CBA started off in the Applicant’s Viridian Line of Credit account, with the bulk of it being applied subsequently for the benefit of others. Further, although it is clear that around $312,000.00 was used to pay off the Applicant’s American Express credit card account, not all of the purchases that had been incurred on that card were for his benefit.

26. [50]

    However, findings made by her Honour pointed to the Applicant receiving, at least, the following benefits for himself:

27. [51]

    In addition, there was evidence that both the Applicant and Barnes were hoping, by their involvement with Kiss, to be rewarded by obtaining Masterton Homes as a client of their businesses.

28. [52]

    There was also evidence that luxury vehicles and a boat had been purchased by shelf companies of which the Applicant was sole director. However, her Honour found that Kiss was the motor car enthusiast and that Kiss was the intended recipient of all the vehicles (ROS26-27).

29. [53]

    Her Honour rejected a submission that the fact that Kiss had received most of the benefits from the scheme indicated that the Applicant’s culpability was, by comparison, significantly lower because “the submission is predicated on the division of assets being complete, when it is apparent that at the time the offending was discovered, the enterprise was continuing” (ROS23).

Sentencing Remarks of her Honour Judge Girdham SC Concerning the Applicant

1. [54]

   It is appropriate to set out parts of her Honour’s sentencing remarks with respect to the Applicant before moving to aspects of the sentencing remarks of his Honour Judge Zahra SC concerning Barnes.

2. [55]

   At an early point in the sentencing remarks, her Honour Judge Girdham SC explained the basis of the jury’s verdicts concerning the element of recklessness, given directions at trial that the Crown was required to prove actual knowledge on the part of the Applicant before verdicts of guilty could be returned. Her Honour said (ROS6):

3. [56]

   Her Honour then proceeded to make findings of fact with respect to the roles of the Applicant, Barnes and others along the lines of the narrative set out earlier in this judgment.

4. [57]

   Her Honour outlined the way in which the Crown and the Applicant put their cases at trial (ROS9-10):

5. [58]

   Her Honour noted the effect of the jury’s verdicts and referred to the maximum penalty for s.193B(3) offences (ROS20-21):

6. [59]

   Soon after, her Honour returned to the roles of the offenders, including the Applicant (ROS22-23):

7. [60]

   Her Honour found that the Applicant’s role was subordinate to that of Kiss (ROS24):

8. [61]

   Her Honour said with respect to the position of the Applicant (ROS27):

9. [62]

   Her Honour made the following findings concerning the objective criminality of the offences (ROS28-29):

10. [63]

    Her Honour then turned to the Applicant’s subjective case (ROS33-35):

11. [64]

    Her Honour made a modest allowance by way of a very late expression of remorse by the Applicant (ROS37-38):

12. [65]

    Her Honour addressed the issue of general deterrence, in the course of which reference was made to the hierarchy of offences under s.193B, a factor significant to this appeal (ROS42-43):

13. [66]

    Her Honour considered issues of accumulation, concurrency and totality before proceeding by way of an aggregate sentence with a finding of special circumstances being made to provide a lengthier period of support upon the Applicant’s release and with a lengthier period on parole to “provide a disincentive for the offender to seek to enrich himself other than by legitimate means” (ROS44-46).

14. [67]

    Her Honour returned to the issue of parity as between the Applicant and Kiss (ROS46):

15. [68]

    Her Honour then nominated the indicative sentences and imposed the aggregate sentence concerning the Applicant as mentioned earlier in this judgment before sentencing Kiss for his offences.

Sentencing Remarks of his Honour Judge Zahra SC Concerning Barnes

1. [69]

   His Honour Judge Zahra SC sentenced Barnes on 14 December 2017 for his offences under s.193B(2) Crimes Act 1900.

2. [70]

   His Honour, of course, had available to him at that time her Honour’s sentencing remarks concerning the Applicant delivered on 28 October 2016.

3. [71]

   His Honour Judge Zahra SC made the following findings concerning the role of Barnes (ROS8-9):

4. [72]

   His Honour recounted findings made by her Honour Judge Girdham SC concerning the recklessness/knowledge issue regarding s.193B(3) Crimes Act 1900 (see [55] above) and her Honour’s assessment of the roles of the co-offenders and the amount they received from their participation in the criminal enterprise (ROS15-17).

5. [73]

   His Honour then moved to an assessment of the objective seriousness of the criminal conduct of Barnes (ROS18) (my emphasis):

6. [74]

   His Honour then made important findings concerning the benefits received by Barnes and his use of inside knowledge of CBA practices (ROS2):

7. [75]

   His Honour made the following additional finding concerning the role of Barnes (ROS22):

8. [76]

   His Honour noted that Barnes did not give evidence at the trial, but did give evidence at the sentencing hearing and made further findings concerning the objective gravity of Barnes’ offences (ROS24):

9. [77]

   His Honour then addressed the relevance of prior good character and outlined evidence adduced in Barnes’ subjective case as well as addressing issues of remorse, risk of reoffending, prospects of rehabilitation and special circumstances (ROS24-28). His Honour made the following findings concerning these issues (ROS28-29):

10. [78]

    His Honour considered the issues of hardship in custody and delay, together with the question of accumulation and totality before indicating his intention to impose an aggregate sentence (ROS31):

11. [79]

    Having regard to the Applicant’s ground of appeal, it is appropriate to set out the entirety of what his Honour said on the issue of parity (ROS31-33) (my emphasis):

12. [80]

    His Honour then proceeded to nominate an indicative sentence of imprisonment for two years and six months with respect to each of the 28 counts before imposing an aggregate sentence of imprisonment for six years with a non-parole period of four years, with the latter period to expire on 14 June 2021.

The Sole Ground of Appeal Alleging Breach of the Parity Principle

1. [81]

   Mr Wendler, counsel for the Applicant, submits that there is a marked disparity between the Applicant’s punishment and that of Barnes so as to give rise to a justifiable sense of grievance which, it was submitted, justified “mollification of an otherwise in range sentence”.

2. [82]

   It was submitted that the only difference between the crimes charged against the Applicant and Barnes was that Barnes was charged with the more serious offence in s.193B(2) (which carried a maximum period of imprisonment of 15 years) whereas the Applicant was charged with offences under s.193B(3) (which carried a maximum penalty of imprisonment for 10 years).

3. [83]

   Counsel for the Applicant pointed to aspects of the sentencing remarks with respect to each of the Applicant and Barnes. Emphasis was placed upon the finding of his Honour Judge Zahra SC that Barnes’ role was “crucial” as he used his special knowledge of the CBA’s internal lending processes to access substantial monies and was in a position of trust.

4. [84]

   Mr Wendler submitted that, unlike the Applicant, Barnes had maintained his innocence at sentence and thus did not demonstrate remorse. In addition, Barnes did not have criminal antecedents.

5. [85]

   Reference was made to the subjective circumstances of the Applicant and Barnes and the differences between them.

6. [86]

   It was submitted that there was clearly a marked difference between the punishment imposed upon the Applicant and Barnes.

7. [87]

   Counsel noted the approach of his Honour Judge Zahra SC that he could not extend the application of the parity principle because of the differences between the offences charged against Barnes as compared to those charged against the Applicant, as a result of the exercise of prosecutorial discretion concerning charge selection (Barnes, ROS31-33 at [79] above).

8. [88]

   Counsel submitted that the parity principle was capable of application in this case with reliance being placed upon Jimmy v R (2010) 77 NSWLR 540; [2010] NSWCCA 60 at [202]. The Court was taken, as well, to what was said in Jimmy v R at [262] concerning the fundamental importance of the equal justice principle which is capable of application even where the persons sentenced are not strictly co-offenders.

9. [89]

   Mr Wendler submitted that the differences in the offences charged against Barnes and the Applicant was a “distinction without a practical difference” because the trial of the Applicant and Kiss had proceeded on the basis that the Crown was required to prove actual knowledge rather than mere recklessness, the difference between the mental element in the offences contained in ss.193B(2) and 193B(3). It was submitted that it was not realistic to suggest that Barnes and the Applicant were not co-offenders because they were charged with effectively the same offences, but with different maximum penalties.

10. [90]

    It was submitted that it is difficult to appreciate how the Applicant does not have a justifiable sense of grievance when he has been convicted of lesser offences and received a greater penalty than Barnes who was convicted of offences which carried a greater maximum penalty, but then received a lesser sentence.

11. [91]

    Mr Wendler submitted that his Honour Judge Zahra SC was wrong in stating that parity considerations did not apply as between the Applicant and Barnes. In practical reality, it was submitted that the Applicant was tried de facto for s.193B(2) offences despite being actually charged with s.193B(3) offences. Counsel contended that his Honour embraced an erroneously restrictive approach to the application of the parity principle, an approach criticised in Jimmy v R.

12. [92]

    Counsel for the Applicant submitted that the parity principle is of wide application and is not to be withheld for technical reasons because the principle is part of the wider principle of consistency in sentencing. It was submitted that the Applicant’s role in the joint criminal enterprise can fairly be described as equal to that of Barnes, or that Barnes’ role was slightly more serious than that of the Applicant given the fact that Barnes approved the monies to be advanced to the Applicant. Without Barnes, the joint criminal enterprise to defraud the CBA could never have been accomplished.

13. [93]

    It was submitted that the Court should intervene and reduce the Applicant’s sentence so that it is either the same, or less than, that imposed on Barnes.

14. [94]

    The Crown noted that this Court in Jimmy v R considered circumstances where offenders are not strictly co-offenders, in that they faced different charges arising out of their involvement in the same criminal conduct.

15. [95]

    With respect to this category, the Crown acknowledged that application of the parity principle is not straightforward. It was noted that the decision in R v Kerr [2003] NSWCCA 234 was disapproved of in Jimmy v R at [130]. There, Campbell JA observed that the decision in R v Kerr should not be followed insofar as it “permitted the parity principle to undo the effect on sentence of different charges being brought against two participants in a common criminal enterprise”.

16. [96]

    The Crown noted that there were few cases where (as in the present case) a person has received a higher sentence than that imposed upon a co-offender who was sentenced for a more serious offence. Reference was made to the decision in Rend v R (2006) 160 A Crim R 178; [2006] NSWCCA 41. The Crown noted that, in Jimmy v R, Campbell JA said (at [160]) that Rend v R did not establish the correctness of the principle in R v Kerr.

17. [97]

    The Crown pointed to a number of decisions in this Court where it has been said that the decision in Green v The Queen; Quinn v The Queen (2011) 244 CLR 462; [2011] HCA 49 does not permit a sentencing court to use the parity principle to, effectively, review the exercise of prosecutorial discretion: Ivory v R [2014] NSWCCA 181 at [61]; Gaggioli v R [2014] NSWCCA 246 at [33]; Dunn v R [2018] NSWCCA 108 at [22].

18. [98]

    The Crown noted, however, that the parity principle has application where co-offenders are charged with different offences, but that the relevant comparison “is more broad and impressionistic” than would normally be the case: Dayment v R [2018] NSWCCA 132 at [65]; Hanley v R [2018] NSWCCA 262 at [56]; Gilmour v R [2018] NSWCCA 295 at [77].

19. [99]

    The Crown accepted that the parity principle would appear to have application in this case in a broad and impressionistic sense, particularly given that Barnes was sentenced for more serious offences than the Applicant.

20. [100]

    It was submitted that the difference between the sentence imposed on the Applicant and that imposed on Barnes was justifiable having regard to the differences between them. It was said that the lesser sentence imposed on Barnes can be explained by reference to his subordinate role within the common criminal enterprise and the lesser reward that he received by his participation in it. The Crown submitted that it cannot be said that Barnes’ role was “equal to” or “slightly more serious” than the Applicant and that the opposite was, in fact, the case.

21. [101]

    It was submitted that there was little to differentiate between the Applicant and Barnes as far as their subjective cases were concerned and the justification for the different sentences does not lie on that side of the case.

22. [102]

    The Crown noted that both sentencing Judges had assessed the objective seriousness of the offences as being high. However, one matter relevant to the objective criminality of Barnes’ offences, but which did not apply to the Applicant, was the breach of trust involved in him being an employee of the CBA.

23. [103]

    The Crown noted the findings made by her Honour Judge Girdham SC concerning the respective roles of the offenders. Although her Honour was not called upon to assess the criminality of Barnes relative to that of the Applicant, it was noted that in the context of discussing the objective seriousness of the offences, her Honour referred to the fact that the scheme involved making corrupt payments to Barnes which indicated that her Honour perceived, consistently with the findings made later by his Honour Judge Zahra SC, that Barnes was subordinate to the Applicant and Kiss.

24. [104]

    The Crown pointed to findings made by his Honour Judge Zahra SC that the rewards received by Barnes were far more modest than those received by the Applicant and Kiss.

25. [105]

    The Crown noted that the findings of the two sentencing Judges were essentially consistent regarding the relative criminality of the Applicant and Barnes and that the sentences can be compared without the need to make allowances for different factual findings.

26. [106]

    The Crown noted the approach of his Honour Judge Zahra SC which was to exercise caution in ensuring that he had not incorrectly applied the parity principle (ROS33) at [79] above).

27. [107]

    With respect to the Applicant’s argument that his Honour did not apply the parity principle and thereby erred, the Crown submitted that nothing turned on that as his Honour’s judgment was not the subject of the appeal and that disparity is a ground that does not depend on demonstration of error: Lowe v The Queen (1984) 154 CLR 606; [1984] HCA 46; Green v The Queen; Quinn v The Queen at [32].

28. [108]

    The Crown submitted that the role of Barnes in the offences was undoubtedly critical and there were multiple steps that he had to take in order to manipulate the CBA’s usual procedures in order to effect the fraud. It was submitted, however, that overall his place in the hierarchy of the criminal enterprise was low. He had a discrete and particular role for which he was paid by the Applicant and Kiss who were the principal actors. The Crown submitted that this was demonstrated by the relatively small rewards that Barnes received.

29. [109]

    It was submitted that the Applicant, on the other hand, received hundreds of thousands of dollars, some of which was spent on luxury purchases. Further, the evidence obtained from the Applicant’s home demonstrated that he was involved in the preparation of paperwork before it was handed to Barnes and that he gave advice to Kiss concerning applications for loans to avoid detection and that the Applicant then took control of most of the fraudulent monies and was responsible for their subsequent disbursements. These steps involved the Applicant meeting with a solicitor to set up shelf companies, of which he was a director, to assist Kiss in making purchases of luxury vehicles and properties.

30. [110]

    The Crown submitted that the Applicant accepted, at first instance, that the evidence demonstrated his involvement in the application process as well as the expenditure of funds received, but that Barnes, by way of contrast, was involved in an admittedly critical, but confined step in the process.

31. [111]

    It was submitted that her Honour Judge Girdham SC found that the Applicant planned to maintain some kind of an interest in the property purchased in Nowra and that his trip to the United States with Kiss to look at real estate demonstrated not only the way in which he used the fraudulent monies for greed, but also the extent to which he was Kiss’ partner in the enterprise.

32. [112]

    The Crown submitted that when regard is had to the relative roles of the Applicant and Barnes, the Applicant can have no justifiable grievance about his sentence being more severe than that imposed on Barnes.

33. [113]

    It was submitted that an extension of time should not be granted and that, in any event, the appeal should be dismissed.

34. [114]

    At the outset, it is important to note the structure of the money laundering offences contained in s.193B Crimes Act 1900:

35. [115]

    Barnes was charged with and convicted of offences under s.193B(2), each of which carried a maximum penalty of imprisonment for 15 years. The Applicant, on the other hand, was charged with and convicted of offences under s.193B(3), each of which carried a maximum penalty of imprisonment for 10 years.

36. [116]

    Section 193B creates a series of offences with an escalating maximum penalty with the gravest offence being that contained in s.193B(1) followed by the offence in s.193B(2) and then an offence under s.193B(3). Knowledge that the “proceeds of crime” are proceeds of crime is an element of a s.193B(2) offence, but not a s.193B(3) offence. With respect to the latter offence, it is for the Crown to prove that the accused person dealt with proceeds of crime being reckless as to whether the relevant property was proceeds of crime. The terms “deal with” and “proceeds of crime” are defined in s.193A.

37. [117]

    The cascading structure of offences contained in s.193B is confirmed by s.193E which provides for alternative verdicts so that, where a person is on trial for an offence under s.193B(2), and the jury is not satisfied that the accused person is guilty of the offence charged, but is satisfied that he or she is guilty of an offence under s.193B(3), the jury may find the person guilty of a s.193B(3) offence and the accused person is liable to punishment accordingly (s.193E(2)).

38. [118]

    Insofar as recklessness is an element of a s.193B(3) offence, it is appropriate to note s.4A Crimes Act 1900 which provides:

39. [119]

    Where a person is to be sentenced for offences under s.193B(3), it is necessary for the sentencing court to keep in mind the elements of an offence under that section so as to guard against the risk of error by reference to the principles in The Queen v De Simoni (1981) 147 CLR 383; [1981] HCA 31 by, in effect, sentencing the offender as if that person had committed an offence under s.193B(2): Atilgan v R [2018] NSWCCA 5.

40. [120]

    Even in a case of a s.193B(3) offence where the Crown relies upon s.4A to prove recklessness by means of proof of knowledge, it remains necessary for the sentencing Judge to be conscious of the confines on sentence imposed by s.193B(3), where the lesser maximum penalty of imprisonment for 10 years is fixed. The maximum penalty is a most important sentencing yardstick: Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 at [30]-[31]; Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39 at [27]. The “spectrum” of conduct which constitutes an offence under a particular section is capped by the maximum penalty which is to be taken into account in identifying where a particular offence lies on that “spectrum”: Elias v The Queen (2013) 248 CLR 483; [2013] HCA 31 at [27]; The Queen v Kilic (2016) 259 CLR 256; [2016] HCA 48 at [19].

41. [121]

    The De Simoni principle operates for the benefit of the offender and is an aspect of the fundamental principle that no one should be punished for an offence for which the person has not been convicted: Nguyen v The Queen (2016) 256 CLR 656; [2016] HCA 17 at [29].

42. [122]

    In a case such as the present, the two offenders are to be sentenced for different offences where there is a substantial overlap in the conduct covered by the offences. As Basten JA said in R v Chandler; Chandler v R [2012] NSWCCA 135 at [7]:

43. [123]

    In approaching the present case, it is necessary to keep in mind the difference between the offences for which the Applicant and Barnes went to trial and at which each was convicted.

44. [124]

    To focus upon the decision of this Court in R v Kerr provides, at the least, a distraction in the context of the present case. The decision in R v Kerr was confined in R v Formosa [2005] NSWCCA 363 (Simpson J, McClellan CJ at CL and Hoeben J agreeing) and Pham v R (2009) 193 A Crim R 190; [2009] NSWCCA 25 (Latham J, Giles JA and Mathews AJ agreeing) before being said to be wrongly decided in Jimmy v R. In Jimmy v R, Campbell JA said at [203]:

45. [125]

    In Jimmy v R, Howie J agreed with Campbell JA and observed (at [245]-[247]) (my emphasis):

46. [126]

    Rothman J agreed with Campbell JA and Howie J and said (at [267]):

47. [127]

    In Dwayhi v R (2011) 205 A Crim R 274; [2011] NSWCCA 67, with the concurrence of Whealy JA and Hidden J, I said at [137]:

48. [128]

    In Green v The Queen; Quinn v The Queen, French CJ, Crennan and Kiefel JJ said (at [30]) (footnotes omitted):

49. [129]

    In Elias v The Queen, French CJ, Hayne, Kiefel, Bell and Keane JJ said at [30] (footnotes omitted):

50. [130]

    In a further passage from Elias v The Queen which bears upon the issues raised in the present appeal, their Honours said (at [35]) (footnotes omitted):

51. [131]

    These passages from Elias v The Queen have been applied by this Court in considering parity grounds of appeal: Ivory v R at [61]-[67] and Dunn v R at [22].

52. [132]

    It is especially helpful to note the observations of Simpson J (McClellan CJ at CL and Fullerton J agreeing) in Ruttley v R [2010] NSWCCA 118 at [53]-[54]:

53. [133]

    In the present case, the Applicant and Barnes were charged as persons involved in different aspects of the same criminal enterprise. Each of them was a critical participant in a process of sustained dishonesty.

54. [134]

    The Crown determined to place the Applicant on trial for a series of s.193B(3) offences although reliance was placed upon the Applicant’s alleged knowledge in proof of the element of recklessness. It was for these offences that the Applicant stood to be sentenced with each offence carrying a maximum penalty of imprisonment for 10 years.

55. [135]

    Barnes stood trial for offences under s.193B(2) with each offence carrying a maximum penalty of imprisonment for 15 years.

56. [136]

    The determination of the present appeal does not involve this Court revisiting or expressing approval or disapproval of the exercise of prosecutorial discretion which saw the two men charged with different offences arising out of the same criminal enterprise.

57. [137]

    The question to be considered is whether, having regard to principles of proportionality, relativity and equal justice, the Applicant may be said to have a legitimate sense of grievance arising from the lesser aggregate sentence imposed upon Barnes for what were, on their face by reference to the maximum penalties, a series of more serious offences.

58. [138]

    The principles emerging from Green v The Queen; Quinn v The Queen, and the endorsement in that case of what was said in Jimmy v R, makes clear that it is open to a person in the place of the Applicant to invoke these principles in support of his sentence appeal. It is not necessary for the Applicant to demonstrate error on the part of one or other of the sentencing Judges who sentenced Barnes and himself.

59. [139]

    It is open to the Applicant to advance a parity or proportionality ground in this Court by reference to the sentence imposed subsequently upon Barnes: Jones v The Queen (1993) 67 ALJR 376; Shortland v R (2013) 224 A Crim R 486; [2013] NSWCCA 4 at [108].

60. [140]

    There are areas of difference between the objective gravity of the offences committed by the Applicant and Barnes. The Applicant was found to be at a high level of the criminal hierarchy involved in this scheme, although lying below Kiss, but above Barnes. The Applicant benefitted significantly and materially from these offences and certainly more so than Barnes. On the other hand, as an employee of the CBA, Barnes engaged in a breach of trust which was critical to the criminal enterprise using inside knowledge which he had gained working in that capacity. Although there are differences in the distribution of the proceeds of the offences, this distinction is not decisive for the purpose of the outcome of the present appeal.

61. [141]

    The subjective cases of the Applicant and Barnes have understandable differences between them, but there is no significant factor which distinguishes between the two men in this respect. Her Honour noted the Applicant’s “old” offences on his criminal history which were said to “have little significance to the sentencing exercise” (ROS38-35 at [63] above).

62. [142]

    A critical difference between the Applicant and Barnes was that each of Barnes’ offences carried a higher maximum penalty than that of the Applicant. This was no technical distinction and it was necessary for this feature to be apparent in the sentencing outcomes between the two persons. It is an unusual case where the person who commits the more serious offences (by reference to maximum penalty) attracts the lesser sentence. That is what occurred in this case. As Simpson J observed in Ruttley v R at [54] (see [132] above), such a case will ordinarily attract application of parity principles.

63. [143]

    A similar scenario gave rise to a successful sentence appeal in Rend v R, where James J (Buddin and Hall JJ agreeing) said (at [106]-[109]):

64. [144]

    The decision in Rend v R was explained in Jimmy v R without criticism. The approach adopted by the Court in Rend v R is consistent with the principles explained in Green v The Queen; Quinn v The Queen and subsequent cases where the proportionality or relativity principle has been called in aid in support of a sentence appeal.

65. [145]

    As Basten JA observed in R v Chandler; Chandler v R (see [122] above), there may be a case where an offender is said to have committed a low range example of a more serious offence while a co-offender has committed a high range example of a less serious offence. This appears to have been the submission made by counsel for Barnes at the sentencing hearing before his Honour Judge Zahra SC (Barnes, ROS33 at [79] above).

66. [146]

    Even allowing for this approach, it is difficult to see how the sentencing outcomes in this case were reached without infringing the proportionality or relativity principle. Both the Applicant and Barnes were critical participants in a serious criminal enterprise where their own respective skill and experience played a vital part in the venture. Yet the Applicant received a significantly heavier sentence for less serious offences than Barnes who was to be sentenced for offences which carried a maximum penalty which was 50% greater than that which applied to the Applicant.

67. [147]

    The present case is an unusual one given the charges brought against the two offenders and the sentencing outcomes which have given rise to this appeal. I am satisfied that the ground of appeal should be upheld.

Resentencing the Applicant

1. [148]

   The Applicant is entitled to have this Court resentence him for the purpose of s.6(3) Criminal Appeal Act 1912. In exercising its independent sentencing discretion, this Court will have regard to the objective circumstances of the Applicant’s offences, his subjective circumstances and all factors relevant to sentence, including the maximum penalty prescribed by s.193B(3) Crimes Act 1900.

2. [149]

   The factual and other findings made by her Honour Judge Girdham SC concerning the objective gravity of the Applicant’s offences and his subjective circumstances were not challenged and should be applied for the purpose of resentencing.

3. [150]

   The legislative guidepost to be applied in the Applicant’s case is the maximum penalty of 10 years’ imprisonment contained in s.193B(3) Crimes Act 1900.

4. [151]

   The proportionality principle is to be applied so as to take into account the significant disproportion arising from the markedly lesser aggregate sentence imposed upon Barnes for his offences under s.193B(2), which carried a much greater maximum penalty. Application of the proportionality principle does not entitle the Applicant to receive an identical sentence to that imposed on Barnes. However, a substantial reduction in the Applicant’s aggregate sentence is appropriate to reflect application of the proportionality principle in this case.

5. [152]

   I am satisfied that the Court should pass a lesser aggregate sentence in the Applicant’s case.

6. [153]

   The parties did not submit that the approach adopted by her Honour Judge Girdham SC was inappropriate in specifying what were identical indicative sentences for each of the 23 offences under s.193B(3) and identical indicative sentences for each of the five attempt offences. I will proceed in the same way for the purpose of resentencing.

7. [154]

   With respect to each of the 23 offences of recklessly dealing with the proceeds of crime under s.193B(3), I nominate an indicative sentence of imprisonment for three years. With respect to each of the five offences of attempting to recklessly deal with proceeds of crime contrary to ss.193B(3) and 344A(1) Crimes Act 1900, I nominate an indicative sentence of imprisonment for two years.

8. [155]

   Having regard to principles of totality, concurrency and accumulation, I am satisfied that an aggregate sentence of imprisonment of seven years should be imposed. A finding of special circumstances should be made for the same reasons adopted in the District Court. A non-parole period of four years and three months should be fixed.

9. [156]

   As the Applicant’s ground of appeal has merit and has been successful, an extension of time is warranted in the circumstances of the case.

10. [157]

    I propose the following orders:

11. [158]

    HAMILL J: I agree with the orders proposed by Johnson J and with his Honour’s comprehensive reasons.