Lou v R

HOEBEN CJ AT CL: I agree with Hamill J and the order which he proposes.

CAMPBELL J: I have had the considerable advantage of reading the judgment of Hamill J in draft. I agree with it and have nothing to add. I agree also with the orders his Honour proposes.

HAMILL J: Li Lou applies for leave to appeal against a sentence imposed by her Honour Judge Culver in the District Court on 21 February 2020. Ms Lou pleaded guilty to a number of charges of what can be described generically as credit card and identity fraud. A number of other offences were taken into account on a Form 1 pursuant to Division 3 of Part 3 of the Crimes (Sentencing Procedure) Act 1999 (NSW). The sentencing Judge imposed an aggregate term of imprisonment of four years and six months with a non-parole period of two years and three months. The sentence was backdated to 20 January 2020 to reflect the time the applicant spent in custody on remand. The total sentence will expire on 20 July 2024 and the applicant will become eligible for release on parole on 20 April 2022.

The applicant relied on a single ground of appeal; namely that the sentence is manifestly excessive. This ground is advanced largely on the basis that the sentencing Judge failed to give proper effect to her Honour’s finding that there would be “exceptional hardship” to the applicant’s children if the applicant was sentenced to imprisonment.

The applicant pleaded guilty to a total of 23 offences and asked a number of others to be taken into account. The charges and associated facts are a little complicated and I will adopt Judge Culver’s alphabetised description of the offences. Ms Lou entered a plea of guilty in the District Court on 29 July 2019 to the most serious charge:

The remaining pleas of guilty were entered in the Local Court on 23 October 2018:

It is unnecessary to descend into the detail of the facts of each offence. There appear to be some minor inconsistencies in the amounts recorded in the various charges sheets and the agreed facts although this seemed to arise from the fact that the same cards were used on more than one occasion. While it is not necessary to articulate or resolve the precise detail of each individual charge, it is important to understand the nature and circumstances of the offending.

The applicant was first charged with the offences identified as H64687220 on 10 October 2017 at Castle Hill Towers after police were notified by the National Australia Bank (NAB) of a number of fraudulent transactions on NAB ATMs. Police searched the applicants bag and located 62 gift cards, each of which had details of a legitimate credit card cloned onto it and a personal identification number (PIN) written on a slip of paper attached. Cash in the amount of $2,500, which had been withdrawn from ATMs using the cloned gift cards, was found in the applicant’s wallet. The applicant participated in an ERISP and accepted that she had made fraudulent transactions using the gift cards with cloned credit card information.

Ms Lou worked at a convenience store in Rozelle, owned by her husband and co-offender, Mr Fan, and Mr Fan’s mother. On 24 October 2017, police executed a search warrant at the convenience store and discovered the ATM had a credit card “skimming” device installed within it. In another room of the store was a video camera that was set up to capture the keyboard of the ATM. Police also found a laptop containing data from more than 1,300 individual credit cards, gift cards and $1.3 million cash in the storeroom. The skimming device allowed credit card numbers and PINs to be obtained by the applicant and her husband from customers who used the ATM in late 2016 and early 2017. The data was then cloned onto gift cards which the applicant used to make, or attempt to make, fraudulent withdrawals from ATMs at various shopping centres around Sydney. That conduct lay at the core of the multiplicity of offences to which the applicant pleaded guilty or acknowledged her guilt. The offences represented a series of sophisticated and well-planned deceptions on customers of the couple’s business.

After the search, the applicant was arrested and charged with H66307542 and the proceeds of crime offence in relation to the $1.3 million found in the storeroom (Charge A). She was granted conditional bail by the Local Court at Parramatta on 3 November 2017, but was taken back into custody on 14 November 2017. On 4 December 2017, the applicant was granted conditional bail by the Supreme Court until she was sentenced on 21 February 2020.

The seriousness of the applicant’s malfeasance cannot be underestimated. Counsel for the applicant did not challenge Judge Culver’s statement that “the authorities have recognised that offences involving the systematic exploitation of the electronic banking system invoke particular significance in both personal and general deterrence.” [1] Her Honour referred to the observations of Bathurst CJ in Thangavelautham v R [2016] NSWCCA 141, another case involving credit card “skimming”. The Chief Justice, with whom Hoeben CJ at CL and (on this issue) RS Hulme J agreed, said at [86]:

See also the observations of RS Hulme J at [104]. The majority (RS Hulme J dissenting) reduced the sentence on parity grounds.

The sentencing Judge also referred to the remarks of Fullerton J (with whom Hodgson JA and Price J agreed) in Yow v R [2010] NSWCCA 251 at [30]:

The applicant did not challenge the findings of the sentencing Judge or the statements of principle referred to in the preceding paragraphs. Indeed, by way of concession, it was submitted in writing:

The applicant placed particular reliance on Judge Culver’s assessment that the evidence established that a sentence of imprisonment would result in “hardship to an exceptional extent” to the applicant’s children. The applicant’s husband and co-accused was sentenced to six years and six months with a non-parole period four years and ten months. [3] The couple were separated and had three children aged (at the time of sentence) 13, ten and six years respectively. There was evidence that the applicant’s mother-in-law was willing to look after the three children but that this would be difficult because she was 63 years of age and had her own business. She wrote a letter to the sentencing Judge explaining the difficulties she and the children would face if the applicant was sent to gaol.

Judge Culver was conscious of the competing submissions of the parties on this issue and of the authorities governing the circumstances in which hardship to third parties may impact on the exercise of the sentencing discretion. Her Honour spent some time considering the matter and it is appropriate to set out that passage of the sentencing judgment in full:

Judge Culver returned to the issue a little later in her remarks to make clear that she was persuaded that the circumstances of the children, and the fact that both parents would be subject to full-time imprisonment, amounted to exceptional hardship:

The applicant submitted that the finding of exceptional hardship was not reflected in the sentence actually imposed. However, the applicant’s submission departed from orthodoxy because it appeared to be based on the proposition that the sentencing Judge (and this Court) could “craft” the sentence in such a way that a full time custodial sentence could be avoided by reducing an otherwise appropriate sentence to such an extent that it would not exceed three years. If the sentencing Judge, or this Court, took that approach it would be possible under the relevant legislative provision to order that the sentence be served by way of an intensive corrections order (ICO). However, the manifest difficulty with the submission was highlighted in the following exchange on the hearing of the appeal:

These submissions cannot be accepted in light of authorities going back at least to R v Zamagias [2002] NSWCCA 17, [7] and recently affirmed in Mandranis v R [2021] NSWCCA 97. In the latter case, Simpson AJA (with whom Garling and N Adams JJ agreed) explained the well-established and correct approach and the orthodox sequence of reasoning at [22] –[29]:

Simpson AJA went on to conclude at [35] – [36]:

The applicant’s suggested approach, however expressed, was contrary to this well-established application of the relevant provisions of the Crimes (Sentencing Procedure) Act. In the absence of a substantial departure from long standing sentencing practice, the submissions cannot be accepted. The sentencing Judge adopted the approach subsequently reiterated by Simpson AJA in Mandranis v R and, in the process, explained the way the finding of exceptional hardship operated in her reasoning towards the ultimate aggregate sentence:

The applicant presented a compelling subjective case and there was no challenge to the sentencing Judge’s finding of exceptional hardship or special circumstances. The applicant was entitled to, and received, a 25% discount for her early pleas of guilty and a 10% discount for the plea to proceeds of crime charge in relation to which the plea was entered in the District Court. The sentencing Judge accepted that the applicant had good prospects of rehabilitation and that she was acting under the influence of her co-offender husband. Her Honour sentenced the co-offender (to the sentence set out at [14] above) in separate proceedings and approached the issue of parity carefully and in accordance with sentencing principle. The applicant received a significantly shorter sentence and no complaint was made as to the proportion between the sentences imposed on the two offenders.

The discounts for the pleas of guilty were applied to the indicative sentences which were nominated as follows:

There was no submission that the sentencing Judge erred in her approach to aggregate sentencing or that the discounts for the pleas of guilty were inadequate. The total amount of putative accumulation was modest. The individual indicative sentences were heavy but within a proper discretionary range given the seriousness of the offending.

The single ground was that the aggregate sentence was manifestly excessive. The approach to such a ground is well established. It involves a finding that the sentencing Judge reached a decision that is so unreasonable or unjust that:

In Dinsdale v The Queen, [10] Gaudron and Gummow JJ emphasised the nature of an appeal based on this limb of House v The King:

In Lowndes v The Queen, [11] the High Court (Gleeson CJ, Gaudron, Gummow, Kirby, Hayne and Callinan JJ) emphasised the role of the sentencing Judge and the basis upon which an appellate court might properly interfere with discretionary sentencing judgments made at first instance:

This passage is particularly resonant in the present case. It may be that another sentencing judge, or a judge sitting on appeal, would have exercised the discretion differently or may held that the hardship to the children was such that the total aggregate sentence ought to have been three years or less, thus giving rise to the possibility that an ICO could be imposed. However, that is not the question for this Court. The approach adopted by Judge Culver was principled and the approach adopted by her Honour was within the proper exercise of discretion. The adjustment to the non-parole period based on a finding of special circumstances was substantial and reflected the finding of exceptional hardship.

In view of the compelling personal circumstances of the applicant and the hardship that would be endured by her children, the sentence imposed was a severe one. However, I am unable to conclude that the total aggregate sentence fell outside of the wide discretionary range available given the gravity of the offending. The proceeds of crime charge (Charge A) involved an amount of money exceeding $1.3 million. The offending against individuals and the electronic banking system was sophisticated and difficult to detect. Credit card fraud and offences involving the theft of identity and credit information are increasingly prevalent. The sentencing Judge held there was no relevant breach of trust because the ATM was owned by a different company.

The applicant continued to offend while on conditional liberty after being charged with the first round of offences on 10 October 2017. While the sentencing Judge found that this fact aggravated the applicant’s moral culpability, her Honour said that the significance was “tempered in this case if one understands and accepts the relationship between the co-offender, Mr Fan, and the offender”. [12] Despite the applicant’s continued offending, her Honour also found that the applicant was of good character and had good prospects of rehabilitation.

This was a very serious case and a harsh sentence was the inevitable outcome, even on a plea of guilty and even in the context of the applicant’s sad and compelling personal circumstances.

I would make the following orders: