R v Hausman; Hausman v R; R v Rostankovski; Rostankovski v R

1. [1]

   FULLERTON J: On 1 April 2021, following their pleas of guilty to offences committed contrary to the Crimes Act 1900 (NSW) and the Criminal Code (Cth), Daniel Rostankovski and Daniel Hausman were sentenced by Abadee DCJ to the following terms of imprisonment:

   1. (1)

      On an indictment containing three counts (one State offence and two Commonwealth offences), Mr Rostankovski was sentenced to imprisonment for 10 years and 5 months with a non-parole period of 7 years and 2 months.

   2. (2)

      On an indictment containing two counts (one State offence and one Commonwealth offence), Mr Hausman was sentenced to imprisonment for 8 years with a non-parole period of 6 years.

2. [2]

   The charges were laid following an investigation by the Australian Federal Police into a largescale conspiracy involving a number of individuals to commit tax frauds (commonly known as the Plutus tax fraud conspiracy) and a conspiracy to deal with the proceeds of those frauds. Neither of the offenders was charged as a co-conspirator in either conspiracy. However, one of the two Commonwealth offences for which Mr Rostankovski was sentenced was the substantive offence of aiding and abetting Adam Cranston (one of the principal conspirators in the Plutus tax fraud conspiracy) to commit a tax fraud contrary to ss 135.1(3) and 11.2(1) of the Criminal Code (Cth).

3. [3]

   That offence, referred to for convenience as the “the aid and abet fraud offence” and attracting a maximum term of imprisonment of 5 years, was fully particularised on the indictment as follows:

4. [4]

   Both offenders were also sentenced for the State offence of blackmail contrary to s 249K(2) of the Crimes Act (NSW). A number of conspirators in the Plutus tax fraud conspiracy, including Adam Cranston, were the victims of that offence.

5. [5]

   That offence, referred to for convenience as “the blackmail offence” and attracting a maximum term of imprisonment of 14 years, was particularised as follows:

6. [6]

   Finally, both offenders were also sentenced for the Commonwealth offence of laundering the proceeds of their commission of the blackmail offence contrary to ss 400.3(1) and 11.2A(1) of the Criminal Code (Cth).

7. [7]

   That offence was referred to for convenience as “the money laundering offence”. It was charged as a joint criminal enterprise that the applicants committed with each other and Sevag Chalabian (a solicitor and principal of the law firm Lands Legal) and particularised as follows:

8. [8]

   It attracted a maximum term of imprisonment of 25 years.

The proceedings on sentence in summary

1. [9]

   Although Mr Rostankovski and Mr Hausman were jointly charged with the State offence of blackmail and with the Commonwealth offence of money laundering, separate sentence proceedings were convened over consecutive dates in March 2021. Separate sentencing judgments were published on 1 April 2021.

2. [10]

   The sentencing reasons were structured referable to what the Crown and senior counsel for both Mr Rostankovski and Mr Hausman had identified in their submissions as the provisions under both the State and Commonwealth sentencing regimes that were material to the sentencing exercise. The sentencing regime in Part IB of the Crimes Act 1914 (Cth) governed the sentence to be imposed for the aid and abet fraud offence (as it related to Mr Rostankovski) and the money laundering offence committed by both offenders. The sentencing regime in the Crimes (Sentencing Procedure) Act 1999 (NSW) governed the blackmail offence.

3. [11]

   While both offenders were entitled to a discount for their pleas of guilty, Mr Hausman also assisted investigating authorities and was entitled to an additional sentencing discount for that reason. The sentencing judge was obliged to comply with ss 16AC(1) and 16AC(2) of the Crimes Act (Cth) and s 23 of the Crimes (Sentencing Procedure) Act (NSW) by specifying the sentences that would have been imposed for the money laundering offence and the blackmail offence but for the assistance he provided to the authorities.

4. [12]

   Senior counsel for Mr Rostankovski submitted that the sentences to be imposed on his client as a co-offender with Mr Hausman in the blackmail and money laundering offences should reflect common law parity principles. [1]

5. [13]

   The lengthy statements of agreed facts which comprehend the course of the offending by both offenders, the sentencing judge’s findings as to the relative seriousness of the offences committed by each of them, including their relative culpability, and the need for the sentences imposed to reflect the sentencing principles (articulated slightly differently under both sentencing regimes) are set out in largely uniform terms in both sentencing judgments. Necessarily, the subjective cases of both offenders were dealt with separately.

6. [14]

   The form of the sentencing orders imposed on both offenders was complex, due in large part to the fact that both offenders were sentenced for State and Commonwealth offences.

7. [15]

   Although an aggregate sentence may be imposed where the Court is sentencing for more than one State offence or more than one Commonwealth offence, there was no scope for the sentencing judge to impose a single aggregate sentence comprehending the State and Commonwealth offences committed by the offenders. The sentencing judge was obliged to impose separate sentences and non-parole periods for those offences [2] and to fix the starting date for each sentence as part of the sentencing order. [3] In their written submissions on sentence, the Crown and senior counsel for the offenders addressed the operation of ss 19(3) and 19(4) of the Crimes Act (Cth) and the way in which totality principles would influence the structure of the ultimate sentencing order. [4]

8. [16]

   In his submissions in this Court, counsel for Mr Hausman referred to what the Supreme Court of Victoria described as the very real difficulties which present when reconciling the principles that govern orders for cumulation and concurrency and the way those considerations inform totality principles more generally where both State and Commonwealth offences are the subject of the sentencing proceedings and where the operation of s 19(3) of the Crimes Act (Cth) is invoked. [5] Similar submissions were advanced in writing at the sentence hearing. The Crown also addressed the operation of s 19 in its written submissions on sentence.

9. [17]

   Section 19 of the Crimes Act (Cth) provides:

10. [18]

    The Crown submitted in written submissions in the court below:

11. [19]

    At Mr Hausman’s sentence hearing, convened two days before Mr Rostankovski’s hearing, the sentencing judge sought assistance from the Crown as to the structure of the sentencing order where the Crown repeated that submission in the following exchange:

12. [20]

    In his oral submissions in reply, counsel for Mr Hausman addressed the effect of s 19(3) and its intersection with totality considerations:

13. [21]

    The issue was not addressed in Mr Rostankovski’s sentence hearing although the Crown’s written submissions on the operation of s 19(3) were repeated.

14. [22]

    In sentencing both offenders, the sentencing judge expressly acknowledged the difficulties that presented in the formulation of the ultimate sentencing order and indicated his intention to follow the approach discussed in Swingler as commended to him by the Crown where, at [78], the Victorian Court of Appeal said:

15. [23]

    In this Court, the Director accepted that although there was nothing in the sentencing remarks to suggest his Honour did not understand how s 19(3) impacted on the structure of the sentences to be imposed on both offenders, the Director did accept that the wording of its submissions in the court below that “a federal sentence must commence immediately after the end of a State non-parole period” may have contributed to his Honour failing to appreciate that the Commonwealth sentence for both Mr Hausman and Mr Rostankovski could be ordered to commence prior to the expiration of the non-parole period for the State offence. That is, his Honour was not obliged, as the Crown might have been taken to have submitted, to order that the Commonwealth sentence commence at the expiration of the non-parole period for the State offence.

16. [24]

    It will be necessary to consider this issue when dealing with the first ground of the Director’s appeal against the sentence imposed on both offenders. Suffice to note at this stage that in the Director’s submission, to the extent that the sentencing judge adjusted any of the individual sentences to accommodate what he wrongly believed was a fixed date for the commencement of the Commonwealth sentence (as the Crown emphasised, a matter that is unstated and unclear in the sentencing reasons) that should not prevent the first ground of appeal being made out, nor, to the extent that is a matter material to the exercise of the residual discretion, should it prevent this Court from intervening and resentencing the respondents in strict conformity with totality considerations.

17. [25]

    The structure of the sentencing orders was further complicated by the absence of any statutory or judicially determined fixed ratio between a sentence and non-parole period for a Commonwealth offence, in contrast to the operation of s 44(1) of the Crimes (Sentencing Procedure) Act (NSW) which requires that the balance of the term of the sentence must not exceed one third of the set non-parole period. [6]

The proceedings in this Court in summary

1. [26]

   On 9 April 2021, Mr Rostankovski and Mr Hausman filed notices of intention to apply for leave to appeal the severity of their sentence pursuant to s 5(1)(c) of the Criminal Appeal Act 1912 (NSW). No grounds of appeal were filed at that time.

2. [27]

   On 5 May 2021, the Director filed notices of appeal against the sentences imposed on each the offenders pursuant to s 5D of the Criminal Appeal Act.

3. [28]

   Although there is not complete correspondence between the grounds of appeal filed by the Director, the Director contends that the sentencing judge’s approach to the application of the principle of totality in the structure of both sentences was flawed, resulting in effective sentences which failed to adequately reflect the totality of the criminality of both offenders.

4. [29]

   Even were the Court not persuaded that an error of sentencing principle has been demonstrated, the Director contends that each of the effective sentences is manifestly inadequate.

5. [30]

   The Crown submitted that the limiting principles applicable to Crown appeals are properly engaged in each appeal and, as respondents, each of the offenders should be resentenced by this Court. [7]

6. [31]

   On 14 July 2021 and 20 July 2021, Mr Rostankovski and Mr Hausman filed notices of leave to appeal their sentence attaching their grounds of appeal.

7. [32]

   They each contend that patent errors of sentencing principle were made by the sentencing judge which, both individually and in combination, require the intervention of this Court in a resentencing exercise. [8] Mr Rostankovski complains that the sentencing judge erred in the way in which he dealt with evidence of his good character. Mr Hausman complains that the sentencing judge erred in his application of parity principles and in the way he treated a finding of special circumstances. In addition, he contends that even were there no patent error of sentencing principle, latent error has infected the exercise of the sentencing discretion in an effective sentence of 8 years and 6 months, that is manifestly excessive being unreasonable and plainly unjust in all of the circumstances.

8. [33]

   Although separate Appeal Books were filed for each of the Crown sentence appeals, given the considerable overlap in the factual matrix that comprised the agreed facts in each of the sentence proceedings, and the intersection of issues raised by the grounds of appeal relied upon by the Director and the applications for leave to appeal by each of the offenders, the Director’s appeals and the applications for leave to appeal were heard together.

9. [34]

   On the hearing of the appeals, the Director, as appellant, addressed first, followed by each of the offenders as respondents to the Crown appeal. The respondents were then invited to develop their written submissions as applicants for leave to appeal against the severity of their sentences to which the Director responded.

10. [35]

    In the event that the Director succeeds on one or more than one of the grounds of appeal relied upon, and that in its residual discretion this Court does not decline to intervene and the respondents are resentenced, their applications for leave to appeal will not need to be determined.

11. [36]

    In the event that the Director’s appeals are unsuccessful, and one or more of the grounds of appeal upon which the applicants rely are made out, and as required by Kentwell v The Queen (2014) 252 CLR 601; [2014] HCA 37, the Court is engaged in a resentencing exercise, the question will be whether this Court is persuaded that a lesser sentence is warranted.

The facts for sentencing purposes

1. [37]

   In each of the sentence proceedings the facts were agreed and set out at length in each of the sentencing judgments. [9]

2. [38]

   Each of the offences the subject of the sentencing proceedings were committed in connection with a conspiracy committed (by others) to commit fraud on the Commonwealth known as the “Plutus tax fraud conspiracy”. The sentence proceedings of each of the offenders were described by the sentencing judge as “satellite or collateral proceedings” to the sentences imposed on various people involved in that conspiracy. [10]

3. [39]

   Having regard to the issues raised by the Director’s grounds of appeal and the issues raised by the sentence appeals, it will be sufficient to refer to the facts as agreed and the sentencing judge’s findings of fact in a summary way.

4. [40]

   The Plutus tax fraud conspiracy involved the establishment and utilisation of a payroll services company, named Plutus Payroll Australia Pty Ltd (Plutus) and related subcontracting companies (second tier companies) controlled by a number of conspirators, principally Adam Cranston and another co-conspirator, Jason Onley, to deprive the Commissioner of Taxation of Pay As You Go Withholding Tax (PAYGW) and Goods and Services Tax.

5. [41]

   Over a three-year period between 2014 and 2017, Plutus collected $141,291,923 in PAYGW and GST which it was obliged to remit to the Australian Taxation Office (ATO). An amount just short of $31 million was remitted by the second-tier companies to the ATO with an additional sum of nearly $4.8 million garnisheed by the ATO. The conspirators misappropriated (and dealt with as proceeds of crime) at least $105,625,304.

6. [42]

   Between August 2016 and February 2017 (the timeframe of Mr Rostankovski’s offending), the money generated by the conspiracy totalled nearly $51 million, of which only about $28.5 million had been remitted to the ATO. The balance was retained by the conspirators. It was accepted for sentencing purposes that Mr Rostankovski knew that Adam Cranston was the ultimate beneficiary of at least $7.5 million of the misappropriated funds.

7. [43]

   From mid to late 2015, Mr Rostankovski began working for Adam Cranston doing relatively menial tasks in connection with another business run by Mr Cranston and another conspirator.

8. [44]

   From 8 August 2016, Mr Rostankovski transitioned into a role in which he aided and abetted Adam Cranston’s fraudulent activities in the Plutus tax fraud conspiracy. His role was to recruit directors, in name only, to manage the “second tier” companies. These “straw directors” were variously unemployed or otherwise relatively unsophisticated people. [11] They played no actual role in the management of the company of which they were a director; instead the companies were controlled by the conspirators. The straw directors were paid to sign various documents as “director” as and when required by the conspirators, including opening personal and company bank accounts with Mr Rostankovski retaining bank cards and other account details which he provided to Mr Cranston.

9. [45]

   Mr Rostankovski actively misled the directors as to the tax liabilities that were accruing to the companies in perpetuation of the fraud. If a straw director raised concerns upon receipt of a notification from the ATO about an outstanding tax debt, Mr Rostankovski assured them that matter would be taken care of and that they were not engaging in any illegal conduct. He also discussed paying one second-tier director to leave the jurisdiction for at least a year to avoid that person being questioned by the ATO or the Office of State Revenue.

10. [46]

    Mr Rostankovski organised for the payment of the straw directors of between $500 and $1,000 on a semi-regular basis and collected mail from them which he then delivered to the conspirators.

11. [47]

    The sentencing judge found as a fact that during the period of Mr Rostankovski’s offending as an aider and abettor of the tax fraud he received at least $192,000 from funds which he knew had been diverted from the ATO pursuant to the conspiracy.

12. [48]

    Between October and November 2016 (that is, during the currency of Mr Rostankovski’s role in aiding and abetting Adam Cranston to dishonestly cause a loss to the Commonwealth), Mr Rostankovski and Mr Hausman (with whom Mr Rostankovski had a pre-existing business and personal relationship) discussed and thereafter planned to blackmail the Plutus conspirators by threatening them with media exposure, reputational damage and scrutiny of their fraudulent activities by the ATO and the police, unless they were paid money. Some of the threats were directed to Adam Cranston whose father was at that time a Deputy Commissioner of Taxation.

13. [49]

    As the sentencing judge noted in his sentencing remarks, the plan to blackmail the conspirators was devised when Mr Hausman became aware of Mr Rostankovski’s role in the tax fraud and of the significant amounts of money that were being transferred through bank accounts controlled by the conspirators and Mr Rostankovski was experiencing increasing dissatisfaction with his “wages” in contrast to the far greater and substantial sums of money the conspirators were receiving. The sentencing judge also noted and accepted the submissions of Mr Rostankovski’s senior counsel that the conspirators were “fobbing off” his requests for more money with false explanations for what they claimed was their inability to increase his “wages”.

14. [50]

    The following is an overview of the facts relating to the joint commission of the blackmail offence by Mr Hausman and Mr Rostankovksi:

15. [51]

    The following is an overview of the money laundering offence with which Mr Rostankovski and Mr Hausman were jointly charged:

The findings of objective seriousness and the relative culpability of the offenders

1. [52]

   The sentencing judge assessed the aid and abet fraud offence committed by Mr Rostankovski at about the mid-range of objective seriousness having regard to the amount of money involved in the fraud, the commission of which he aided and abetted, the degree of planning involved in the role he performed, the duration of his involvement relative to the duration of the overall fraudulent scheme, and the status of the Commonwealth as the victim of the fraud. The sentencing judge accepted the submission advanced by Mr Rostankovski’s counsel that he was not a member of “the inner circle” of those who conspired to perpetuate the tax fraud.

2. [53]

   The sentencing judge assessed the blackmail offence as well above the mid-range and the money laundering offence also above the mid-range. He rejected the Crown’s submission that the conduct comprehended by the blackmail offence was in the high range of objective seriousness in circumstances where the impact of the threat made to the Plutus conspirators was of a different magnitude when compared to other cases to which he was referred and where the conspirators were able to absorb their payment of the blackmail monies as an “overhead” of their sophisticated and lucrative criminal enterprise. The sentencing judge also found the threat of exposing tax fraud was of a comparatively lesser order then the threat of exposure of other serious indictable offences, for example sexual assault, murder or violent physical assault.

3. [54]

   He was satisfied that the blackmail offence (which involved two separate demands with menaces delivered over a reasonably short period of time and involving multiple victims) involved extensive planning over a period of three months. He also found that the first and second blackmail demands were more effective, and the threats of exposure more credible, because they were made whilst the tax fraud was ongoing. In addition, because the threats involved the revelation of actual criminal wrongdoing, he was satisfied the Plutus conspirators would be more likely to accede to the threat and were unlikely to complain to police.

4. [55]

   The sentencing judge found Mr Hausman’s role and responsibility in the joint criminal enterprise to blackmail the Plutus conspirators was greater than that of Mr Rostankovski, with the “mechanisms” according to which the blackmail was planned and executed his design. Mr Hausman’s greater level of moral culpability was also reflected in his recruitment of Mr Barrett and Mr Chalabian and in his instigation of the second blackmail demand.

5. [56]

   The sentencing judge found that the money laundering offence committed by Mr Hausman was well above the mid-range of objective seriousness and towards the high end of that range with the most material factors in that appointment being the sum of money involved, Mr Hausman’s knowledge of the illegal source of those monies and what the sentencing judge described as the sophisticated and organised level of planning involved in the commission of the offence in order that the proceeds of the blackmail would be concealed. He also found that Mr Hausman was the architect of the money laundering scheme and that he had the lead role in working with Mr Chalabian to receive and dispose of the proceeds. The sentencing judge rejected the Crown’s submission that Mr Hausman’s conduct was in the high range of objective seriousness. He found that although Mr Hausman’s conduct in the money laundering offence was intimately connected with his role in committing the blackmail offence, and in that sense it was intended to exploit and conceal the product of that offending, it did not form part of any ongoing organised criminal activity.

6. [57]

   The sentencing judge assessed Mr Rostankovski’s offending in his commission of the money laundering offence as above the mid-range of objective seriousness, being partly a function of his role relative to Mr Hausman. The sentencing judge emphasised, however, that Mr Rostankovski was not a passive investor who merely acquiesced in Mr Hausman and Mr Chalabian’s dealings. To the contrary. Mr Rostankovski insisted that he be “kept in the loop” and instructed Mr Chalabian to use a company over which he exercised control as a vehicle for the investment of the proceeds of his offending.

7. [58]

   The sentencing judge was satisfied that each of Mr Hausman and Mr Rostankovski gained financially through their profit-sharing agreement.

8. [59]

   In sentencing both offenders for multiple, objectively serious offences, the sentencing judge treated general deterrence as fundamental to the sentencing exercise.

Mr Hausman’s subjective case

1. [60]

   Mr Hausman was aged 51 of the time of sentence. He had no relevant prior criminal record which the sentencing judge accepted reduced the need for the sentence to reflect specific deterrence.

2. [61]

   Mr Hausman had two dependent children from two previous partners. In reviewing the evidence tendered by Mr Hausman to support a finding that his pending incarceration would impact negatively upon each of his children, the sentencing judge was not satisfied that the hardship his family would experience was exceptional. [12] He did however accept that given that Mr Hausman would be experiencing custody for the first time, and that separation from his wife and children would be onerous for that reason, those factors would be taken into account in determining the length of the non-parole periods for both the State and Commonwealth offences.

3. [62]

   The sentencing judge noted the medical evidence relating to Mr Hausman’s physical and mental health, including that he suffers from Type II diabetes which had been poorly controlled in the year prior to sentence. He also noted Mr Hausman had been diagnosed with a depressive disorder and a substance use disorder which are controlled by medication.

4. [63]

   There was no submission advanced on Mr Hausman’s behalf that his physical or mental health contributed in any material way to his offending or reduced his criminal culpability. It was submitted, however, that his relatively fragile health status was likely to deteriorate in the custodial environment and that his time in custody would be more onerous for that reason. After reviewing the reports tendered from a range of health professionals, the sentencing judge was not satisfied the evidence was of sufficient weight to allow for a finding that Mr Hausman’s health would deteriorate in custody such as might have ameliorated the length of his sentence. He was satisfied that Mr Hausman’s rehabilitation may be hindered were his mental health inadequately treated whilst in custody, a matter which the sentencing judge took into account when finding special circumstances existed to justifying varying the statutory non-parole period for the State offence of blackmail. The length of the non-parole period for the Commonwealth money laundering offence was brought into alignment with the ratio applied to the State offence.

5. [64]

   The sentencing judge was satisfied that Mr Hausman was contrite and remorseful despite having not given evidence on sentence. He accepted that Mr Hausman’s early pleas of guilty entered in the Local Court, his letter to the Court (tendered on sentence without objection) in which he spoke of his shame and self-disgust at being driven to offend out of greed, together with his willingness to cooperate with law enforcement authorities, was eloquent of his remorse. The sentencing judge was also satisfied that Mr Hausman’s consent to the forfeiture of various interests in property valued at $17 million in separate forfeiture proceedings reinforced the other evidence of his remorse and enhanced his prospects for rehabilitation.

6. [65]

   The sentencing judge was satisfied there was little likelihood of Mr Hausman reoffending and that he had good prospects of rehabilitation.

7. [66]

   Mr Hausman was afforded a combined sentencing discount of 50% which took account of the early guilty pleas (25%), his past assistance (5%) and his future assistance to authorities (20%) which the sentencing judge accepted was of high value. [13] I note that at the time of sentence Mr Hausman was expected to give evidence in the separate trials of Mr Barrett and Mr Chalabian in accordance with his undertaking. I also note that he has already given evidence in the trial of Mr Barrett which resulted in a hung jury. Mr Barrett’s retrial is scheduled for February 2022. It is expected that Mr Hausman will give evidence in that trial. Mr Chalabian’s trial is also listed for hearing in 2022.

Mr Rostankovski’s subjective case

1. [67]

   Mr Rostankovski had no criminal record. He adduced positive evidence of his good character which the sentencing judge found established. [14] He was aged 27 at the time of the offending and 32 at the date of sentence.

2. [68]

   The sentencing judge accepted that Mr Rostankovski was remorseful and contrite, that the likelihood of him reoffending was very low and his prospects of rehabilitation were good.

3. [69]

   A report of Dr Dayalan, forensic psychiatrist to whom Mr Rostankovski had given a history of physical and emotional abuse by his father, was tendered. Dr Dayalan expressed the opinion that features of Mr Rostankovski’s psychological profile contributed to his offending, including chronic low self-confidence and self-esteem and a sense of inadequacy, making him susceptible to adverse influence from others. Dr Dayalan diagnosed an adjustment disorder which had developed after Mr Rostankovski’s arrest.

4. [70]

   The sentencing judge accepted that psychological features played a role in Mr Rostankovski’s commission of the aid and abet fraud offence by reason of the money he was receiving and the fact that Adam Cranston and the Plutus conspirators appeared to him to be successful business people, which may have had a “dizzying impact”, compromising his judgment. However, as the sentencing judge noted, Mr Rostankovski chose to remain involved with Mr Cranston despite becoming aware of the scale of the tax fraud. The sentencing judge found no causal link between any susceptibility Mr Rostankovski had to the influence of others in his commission of the blackmail and money laundering offences

5. [71]

   The sentencing judge was not satisfied that Mr Rostankovski had suffered extra-curial punishment in the form of an absence of paid employment since his arrest and his wife losing her employment.

6. [72]

   In sentencing for the State offence of blackmail, his Honour made a finding of special circumstances to facilitate Mr Rostankovski’s rehabilitation and his effective reintegration into the community following his release and, to a lesser degree, because of hardship to his family.

The structure of the sentence imposed on Mr Rostankovski

1. [73]

   The total effective sentence of 10 years and 5 months with a non-parole period of 7 years and 2 months imposed on Mr Rostankovski comprised an aggregate sentence of 8 years for the two Commonwealth offences of aid and abet a fraud and money laundering and a separate sentence of 4 years for the blackmail offence.

2. [74]

   After taking into account the pleas of guilty to the two Commonwealth offences and allowing a 20% discount for the timing of the pleas, their utilitarian value and the willingness of Mr Rostankovski to facilitate the course of justice, [15] sentences of 1 year and 7 months for the aid and abet a fraud offence and 9 years and 6 months for the money laundering offences were indicated. Recognising what the sentencing judge described as the need for “a degree of accumulation” between the two indicative sentences due, as he saw it, to the fact that there would not have been any money laundering were it not for Mr Rostankovski’s involvement in the tax fraud, and the fact that greed was a motivator in the commission of both offences, an aggregate sentence of 10 years imprisonment was proposed. In the ultimate sentencing order that aggregate sentence was reduced to a term of imprisonment of 8 years and was ordered to commence at the expiration of the non-parole period for the State offence of blackmail.

3. [75]

   After applying a discount of 20% for the plea of guilty to the blackmail offence [16] a sentence of 4 years and 9 months was appointed. In the ultimate sentencing order, a term of imprisonment of 4 years was imposed with a non-parole period of 2 years and 5 months. In compliance with s 19(3) of the Crimes Act (Cth) that sentence was ordered to commence first.

4. [76]

   Earlier in his sentencing remarks the sentencing judge acknowledged the need for the ultimate sentence to reflect totality principles, qualified by the need to ensure that its overall effect was not “crushing”. He said:

5. [77]

   The sentencing judge then made the following sentencing order which I set out in full:

The structure of the sentence imposed on Mr Hausman

1. [78]

   Mr Hausman was also sentenced for the State offence of blackmail and the Commonwealth offence of money laundering offence. The total effective sentence comprised what the sentencing judge described as “the notional starting point for the head sentences of both the State and Commonwealth offences of 10 years and 15 years respectively” to each of which he applied a 50% discount to reflect the combined value of Mr Hausman’s pleas of guilty (25%) and his assistance to the authorities (20% for future assistance and 5% for past assistance [17] ) from which was derived what the sentencing judge described as “the appropriate sentences [of] 5 years (for the blackmail offence) and 7 years, 6 months (for the money laundering offence)”. He went on to say:

2. [79]

   Earlier in his sentencing remarks the sentencing judge acknowledged, as he did when sentencing Mr Rostankovski, the need for the ultimate sentence to reflect totality principles qualified by the need to ensure that its overall effect was not “crushing”. He said:

3. [80]

   The sentencing judge then made the following order which I set out in full:

The Crown appeals

1. [81]

   The grounds of appeal filed by the Director against the sentences imposed on the respondents were particularised differently.

2. [82]

   The Director relied on the following grounds of appeal in its appeal against Mr Rostankovski’s sentence:

   1. (1)

      The sentencing judge erred in his application of the totality principle.

   2. (2)

      The following components of the sentence imposed by the sentencing judge are manifestly inadequate:

3. [83]

   The Director relied on the following grounds of appeal in the appeal against Mr Hausman’s sentence:

   1. (1)

      The sentencing judge erred in his application of the totality principle.

   2. (2)

      The sentencing judge erred in specifying the sentence that would have been imposed but for the reduction made for the respondent’s undertaking to co-operate with law enforcement authorities.

   3. (3)

      The following components of the sentence imposed by the sentencing judge are manifestly inadequate:

4. [84]

   Despite the Director’s contention in the second ground of Mr Rostankovski’s appeal that error in the application of the totality principle (at least by reason of an excessive allowance for totality) resulted in a manifestly inadequate sentence, and although a contention in similar terms was not made in the Director’s appeal against Mr Hausman’s sentence, because the first ground in both appeals contends that a discrete and patent sentencing error was committed in the sentencing judge’s application of totality principles, an error which, if established, and subject to the principles applicable to Crown appeals, would require this Court to resentence both respondents, it is convenient to deal with the first ground in both appeals before considering whether the Director has demonstrated that the effective sentence imposed on each of the respondents is manifestly inadequate in any event, either because the sentences imposed for the individual offences are themselves manifestly inadequate and/or because the total effective head sentence suffers from that flaw.

5. [85]

   In the course of the hearing an issue arose as to whether, should the first ground of appeal be made out, the Court should be concerned with the question whether in the exercise of this Court’s residual discretion to decline to intervene and to resentence the respondents, it was necessary to undertake an assessment of the inadequacy of their sentences. In the Director’s submission, the identified error in relation to totality in both appeals would, of itself, satisfy the Court that it should not refuse to exercise its discretion to resentence the respondents without it being necessary for the Court to find that the sentence imposed on each of the offenders was also manifestly inadequate.

6. [86]

   In support of that submission, the Crown referred to a line of High Court authority succinctly summarised in CMB v Attorney-General for New South Wales (2015) 256 CLR 346; [2015] HCA 9 where, at [33], French CJ and Gageler J said:

7. [87]

   Their Honours went on to refer to Heydon JA in R v Hernando (2002) 136 A Crim R 451; [2002] NSWCCA 489 where, at [12], his Honour observed:

8. [88]

   Kiefel J (as her Honour then was), Bell and Keane JJ also said, at [54]:

9. [89]

   In the Crown’s submission, the passages cited are authority for the proposition that were the Crown to establish patent error in the sentencing judge’s treatment of totality principles alone (that is, without the need for a further finding of manifest inadequacy) the Court’s discretion to intervene would be enlivened.

10. [90]

    The Crown did however acknowledge that this Court has expressed divergent views on that issue.

11. [91]

    In R v Janceski [2005] NSWCCA 288, decided shortly after Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 (although not referring to it), the Crown alleged manifest inadequacy in the sentence imposed. The Crown also pointed to a number of errors made by the sentencing judge which may have contributed to the inadequacy. Hunt AJA said of the sentence at [25]:

12. [92]

    The Crown submitted that the analysis by Hunt AJA in Janceski is not authority for the proposition that absent a ground of appeal alleging manifest inadequacy, a manifestly inadequate sentence must be shown to have been imposed in order for the discretion to be enlivened. [18]

13. [93]

    The Crown also referred to Manojlovic v R; R v Manojlovic [2020] NSWCCA 315, in which N Adams J rejected the Crown’s submission that the Court should exercise its discretion to intervene and resentence on a Crown appeal even were the Court not satisfied that the sentence was manifestly inadequate. Her Honour expressed the following view at [244]:

14. [94]

    In that case, her Honour was ultimately satisfied that the sentence under challenge was manifestly inadequate. That being the case, her Honour’s consideration of whether the discretion may be exercised without a finding of manifest inadequacy is strictly obiter.

15. [95]

    The Crown referred to two more recent decisions of this Court, [19] together with Director of Public Prosecutions (NSW) v Burton [2020] NSWCCA 54 (which was relied on by the Crown in Manojlovic) in which Beech-Jones J (as his Honour then was) queried the correctness of the approach proposed by N Adams J in Manojlovic.

16. [96]

    In Dong, [20] his Honour said at [6]:

17. [97]

    In oral argument, Mr Walker SC for Mr Rostankovski observed that the Crown’s second ground of appeal, which alleged manifest inadequacy on multiple bases, included “an error in the application of the totality principle by reason of… excessive allowance for it resulting in manifestly inadequate sentences”. For that reason, he submitted that the contested significance or necessity of also demonstrating manifest inadequacy before the residual discretion to decline to intervene is enlivened does not arise.

18. [98]

    For the reasons which follow, since I am not persuaded that the error of principle the subject of the first ground of the Director’s appeals has been made out, any difference in the approach taken by judges of this Court in the decisions to which we were referred does not need to be decided.

The first ground of appeal

1. [99]

   At the hearing of the appeal there was no disagreement as to the principles that emerge from the authorities concerning the totality principle, not least that its application in any given case is discretionary. Those principles should, however, be briefly restated.

2. [100]

   In Mill v The Queen (1988) 166 CLR 59; [1988] HCA 70 (Mill) at 63, the totality principle was identified as a recognised principle of sentencing to assist the court when structuring a sentence involving multiple offences. By adopting the following statement from Thomas, Principles of Sentencing, [21] its operation was described by the High Court [22] as follows:

3. [101]

   In the immediately following passage, the Court in Mill noted the language used by Lord Parker LCJ in R v Faulkner (1972) 56 Cr App R 594 that the question whether the imposition of cumulative sentences was commensurate with the gravity and totality of the criminal conduct was accompanied by taking what has been described as “a last look” at the total sentence to see whether it looks wrong. [23]

4. [102]

   In Pearce v the Queen (1998) 194 CLR 610; [1998] HCA 57, McHugh, Hayne and Callinan JJ (at 623-624), citing Mill, expressed the effect of the totality principle, albeit from the offender’s perspective:

5. [103]

   In Mill (at 63), the Court suggested two approaches to achieving totality:

6. [104]

   The Court in Johnson v The Queen [2004] HCA 15 [24] affirmed the principle of totality established in Mill and Pearce in the following passage:

7. [105]

   As a matter of sentencing principle there is no general rule that dictates whether sentences should be imposed concurrently or consecutively, regardless of whether the offences were committed as part of a single episode of criminality or constituted discrete acts of criminality. It is the application of totality principles that will inform that question. [25] That is not to say that in recognition of the underlying principle of totality that a sentence for multiple offences not be crushing, that the sentencing judge might not also adjust the individual sentences before ultimately determining whether the total effective sentence appropriately factors in considerations of concurrency or accumulation, or that it would be an error of sentencing principle for the sentencing judge to take that approach.

8. [106]

   While it might be said that the High Court in Johnson and other decisions of this Court which have followed it [26] have considered that the preferred or conventional approach in applying totality principles is to determine the degree to which the individual sentences should be concurrent, partly concurrent or wholly accumulated (or a notional assessment of those considerations when an aggregate sentence is imposed), the ultimate question is whether in application of totality principles the ultimate and effective sentence adequately and fairly encompasses the totality of the criminality so as to arrive at a sentence which also satisfies the principle of proportionality.

9. [107]

   The Director did not submit that the sentencing judge misstated the law that governs application of the principle of totality. Neither was it submitted that his Honour failed to appreciate that a principled approach to the issue would ensure an appropriate relativity between the totality of the criminality in the composite offending by each of the respondents and the ultimate sentence imposed, or even that his Honour failed to appreciate that appropriate relativity might be achieved either by reducing the individual sentences, which would necessarily have the effect of adjusting the total effective head sentence to be imposed or by making orders of partial concurrency to achieve the same result. Instead, the Director submitted that the sentencing judge made an erroneously excessive allowance for totality in the ultimate (effective) sentences imposed on both respondents by adopting both approaches. In effect, the Director complained that a “process error” was committed by the sentencing judge “double counting” for totality in the ultimate sentence imposed on both respondents, an approach which in the Director’s submission constitutes a patent error of sentencing principle which requires correction by this Court.

10. [108]

    Analysed in that way, the issue raised by the first ground was whether the Director had made out the case that the sentencing judge erred by factoring in an adjustment for totality at successive points in his sentencing reasons for both respondents, by taking both what is described as the unorthodox approach to totality of lowering the sentences for the individual Commonwealth and State offences to account for what he was satisfied were the related or overlapping circumstances in which the offending occurred, and then taking the additional step of further reducing those sentences, in framing the ultimate sentencing order.

11. [109]

    When sentencing Mr Hausman, the sentencing judge also ordered the Commonwealth offence of money laundering to commence at the expiration of the sentence for the State offence of blackmail. In Mr Rostankovski’s case, his Honour ordered that the aggregate sentence for the money laundering offence and the aid and abet the fraud offence commence at the expiration of the sentence for the State offence of blackmail. That sentencing structure had the effect that the State and Commonwealth sentences would be served partly concurrently (in Mr Rostankovski’s case to the extent of 1 year and 7 months and in Mr Hausman’s case by 2 years).

12. [110]

    The Director submitted that the first ground in both appeals is made out in the following analysis of the sentencing reasons.

The Crown’s analysis of the sentence imposed on Mr Rostankovski

1. [111]

   The first step in the Crown’s analysis of Mr Rostankovski’s sentence concerns the aggregate sentence imposed for the two Commonwealth offences:

2. [112]

   In oral submissions, Mr Walker submitted that although the identification of a “process error” in the structure of a sentencing order can be a valuable way of exposing an error of principle of the kind contended for by the Director, on this appeal no error of that kind has been demonstrated. He further submitted that to the extent that the process error (so-called) is a product of the sentencing judge misunderstanding the operation of s 19(3) of the Crimes Act (Cth), the Director cannot avail itself of that error, if it is an error, when it likely sources from the Crown’s submissions on sentence.

3. [113]

   Senior counsel submitted that the fact that there was partial accumulation between two Commonwealth offences at (a) in the Director’s analysis could not conceivably be the endpoint of the application of totality considerations when what his Honour described as “the starting point” for the state offence of blackmail (the next step in the Director’s analysis at (b) above) had not been accounted for in a sentencing exercise which involved three separate and distinct offences embracing two distinct statutory sentencing regimes.

4. [114]

   Senior counsel submitted that the sentencing judge made it clear beyond question that it was only after nominating 4 years and 9 months for the blackmail offence that he ultimately turned to totality considerations when he said:

5. [115]

   Mr Walker submitted that the sentencing reasons reflect a clear and deliberate exercise of a sentencing discretion which necessarily incorporated considerations of concurrency and accumulation in the ultimate sentencing order and in the appointment of starting dates in compliance with the Commonwealth governing law. Mr Walker accepted that the sentencing judge’s reasons were unclear. However, he submitted that the Director’s stepped analysis of the sentencing reasons and the deconstruction of the language used by the sentencing judge as a means of identifying an arithmetic double-counting of totality considerations is artificial. In his submission, it undermines the intuitive synthesis which is the hallmark of the exercise of the sentencing discretion which was made more complex in this case given the Director’s election to lay both Commonwealth and State offences and the obligation of the sentencing judge to comply with the statutory language of s 19(3) of the Crimes Act (Cth) in a principled approach to considerations of totality.

6. [116]

   Although Mr Walker accepted that the indicative sentence for the money laundering offence exceeded the aggregate sentence ultimately imposed (described in the written submissions as a “curious feature” of the sentencing order) it was not a feature conclusive of error when the aggregate sentence of 8 years ultimately imposed fairly and appropriately comprehend the total criminality reflected in Mr Rostankovski’s commission of the two Commonwealth offences.

7. [117]

   The Director submitted that a stepped analysis of the sentencing reasons in Mr Hausman’s case exposes an error of the same kind as was exposed in the analysis of Mr Rostankovski’s sentence:

8. [118]

   As with the sentencing order made in Mr Rostankovski’s case, the Director accepted that it might be open to this Court to infer that in making the further downwards adjustment of the sentence for the money laundering offence the sentencing judge wrongly considered himself bound under s 19(3) of the Crimes Act (Cth) to commence that sentence immediately upon the expiry of the non-parole period for the State offence of blackmail, as distinct from ordering that it commence prior to the expiration of the non-parole period imposed for the State offence provided there was no gap between the expiration of one sentence and the commencement of the other. The Crown submitted, however, that irrespective of what might have been his Honour’s misinterpretation of the operation of s 19(3), and irrespective of the suggestion that he was encouraged by the Crown’s submission on sentence to commence the Commonwealth offence at the conclusion of the non-parole period for the State offence, that approach merely compounded the sentencing error he committed by taking the totality of Mr Hausman’s offending into account twice.

9. [119]

   In Mr English’s submission the Director’s analysis of the sentence does not expose the error of principle contended for. In his submission, prior to making the ultimate sentencing order the sentencing judge was at pains to explain the structure of the sentence making it clear that he applied totality considerations when he reduced the discounted sentence for the money laundering offence of 7 and 6 months to 5 years in the ultimate sentencing order. Counsel submitted that while reducing the sentence for that offence on account of totality may be an unorthodox approach, it was nonetheless a permissible approach which did not preclude the sentencing judge from also taking the additional step of allowing for a measure of concurrency between that sentence and the sentence for the blackmail offence in order to avoid a crushing sentence.

10. [120]

    In counsel’s submission, that approach did not disclose an error of sentencing principle. In his submission, on a proper analysis of the Director’s submissions, the first ground of appeal is a complaint that the sentencing judge gave undue weight to the operation of totality principles in imposing a total effective sentence of 8 years with a non-parole period of 6 years. While counsel accepted that complaint might be called in aid of a submission that the sentence is manifestly inadequate, it is not a submission that is available to the Director in seeking to demonstrate a patent error of sentencing principle.

11. [121]

    Counsel further submitted that this Court would not find favour with the Director’s submission that, having lowered the sentence for the money laundering offence, the sentencing judge should have revisited the extent to which that sentence should be served concurrently with the sentence for the blackmail offence in circumstances where the sentencing judge was, at the very least, encouraged by the Crown at the time of sentence to commence the Commonwealth offence at the conclusion of the non-parole for the State offence. [31]

12. [122]

    In my view, the Director’s analysis of the sentencing reasons relied upon to demonstrate error in the application of totality principles in the sentences imposed on both Mr Hausman and Mr Rostankovski has failed to expose that error. Although the sentencing judge’s use of the concept of a “net” or “notional net effective terms of imprisonment” was opaque, the contention that there was a double counting of totality considerations in the sentencing reasons which followed his use of those terms, is not sustainable, or at least not sustainable with sufficient certainty to expose a sentencing error.

13. [123]

    Further, although an arithmetic analysis of the steps through which the sentencing judge appeared to notionally pass before arriving at the ultimate or effective terms term of imprisonment imposed on each of the respondents gives rise to an appearance or suggestion of a “double counting” for totality considerations, I am not persuaded that the patent error of sentencing principle for which the Director contends has been made out. Even were there a process error in the application of totality principles of the kind contended for by the Director, in the circumstances of this case where there is at least a real risk that the Crown may have unwittingly contributed to that error, in the exercise of this Court’s residual discretion I would decline to re-exercise the sentencing discretion.

14. [124]

    Finally, it is deserving of emphasis that there is no single method mandated by the authorities according to which the principle of totality must be applied, or that an approach which involves lowering an individual sentence precludes a sentencing court from taking the additional step of allowing for a measure of concurrency between the individual sentences when the sentencing order is made. The passage extracted from Johnson above makes that clear. Furthermore, where, as here, the gravamen of the Director’s complaint is that the rationale for the final adjustment of the individual sentences is unclear and that, for that reason, the sentencing reasons are legally deficient without that complaint being a separate ground of appeal, I am not persuaded that the error of principle the subject of the first ground of appeal has been made out.

15. [125]

    I would dismiss the first ground of appeal in the Director’s appeal against the sentences imposed on both Mr Rostankovski and Mr Hausman

Are the effective sentences imposed on the respondents (or either of them) manifestly inadequate?

1. [126]

   Although Ground 2 of the Director’s appeal against the sentences imposed on Mr Rostankovski and Ground 3 of the appeal against the sentence imposed on Mr Hausman are also differently expressed, in essence the Director contends that both the individual sentences (and in Mr Rostankovski’s case the aggregate sentence for the two Commonwealth offences) and the total effective head sentences imposed are manifestly inadequate.

2. [127]

   The legal principles that apply to a ground of appeal contending that a sentence is either manifestly excessive or manifestly inadequate are well established. [32] They have been regularly restated to require the applicant to establish that the sentencing discretion has miscarried resulting in a sentence that is unreasonable or plainly unjust. [33]

3. [128]

   An important limiting principle where either manifest excess or manifest inadequacy is asserted provides that appellate intervention is not justified simply because the result arrived at in the sentencing court is markedly different from sentences imposed in other cases, or that the appellate court may have exercised the sentencing discretion differently. Both as a matter of sentencing principle and as a reflection of the breadth of the sentencing discretion there is no single correct sentence that may be imposed in a given case. Intervention is only warranted where the sentence imposed allows for no conclusion other than that there must have been a misapplication of sentencing principle or where the sentence imposed exceeds a sentencing range to the extent that error must have infected the sentencing discretion.

4. [129]

   The Director submitted that the sentences indicated for the two Commonwealth offences, each of which incorporated a 20% discount for the plea of guilty, are erroneously below the range of sentences that could be justly indicated for offending of objective seriousness: for the aid and abet fraud offence a sentence of 1 year and 7 months was indicated against a maximum sentence of 5 years for offending assessed at the mid-range of objective seriousness and 9 years and 6 months against a maximum sentence of 25 years indicated for the money laundering offence assessed at above the mid-range of objective seriousness.

5. [130]

   Were the Court not satisfied that the indicative sentences were erroneously low, the Director submitted that the aggregate 8 year sentence ultimately imposed for the Commonwealth offences is the clearest indication that error has infected the process of aggregation since the indicative sentence for the money-laundering offence is 18 months higher than the aggregate sentence and where the two offences were separated in time and involved different and distinct criminality with minimal overlapping conduct.

6. [131]

   In the Director’s submission, the money laundering offence, which involved a joint enterprise to receive and disburse $24 million through a solicitor’s trust account, funds which derived from a successful blackmailing of members of a criminal syndicate in which the respondent had played a accessorial role, necessitated that general deterrence, public denunciation and community protection carried very significant weight in the sentencing exercise. In the Director’s submission, none of these factors was adequately reflected in an 8 year aggregate sentence.

7. [132]

   The Director further submitted that an undiscounted sentence of 6 years against the maximum penalty of 14 years imprisonment for the blackmail offence, also assessed by the sentencing judge at above the mid-range of objective seriousness, was erroneously low. In the Director’s submission the unexplained reduction of the discounted sentence of 4 years and 9 months imprisonment to imprisonment to 4 years, with a non-parole period of 2 years and 5 months, also reflected a separate error of sentencing discretion.

8. [133]

   In the Director’s submission, the compounding effect of inadequate sentences for three separate and distinct episodes of serious offending by Mr Rostankovski has resulted in a total effective head sentence and non-parole period that is manifestly inadequate.

9. [134]

   In support of that submission the Director relied upon what this Court said in R v KM [2004] NSWCCA 65 at [55] to reinforce the need for a sentencing court to be satisfied of the proper application of totality principles not only to ensure that the overall sentence is not too harsh but also to ensure that it is not too lenient.

10. [135]

    Finally, the Director submitted that, latent error having been established, the Court would not be persuaded in the exercise of its residual discretion that Mr Rostankovski should not be resentenced. In advancing that submission a number of matters were relied upon. In particular, the Director pointed to a significant disparity between the effective sentence of 10 years imprisonment with a non-parole period of 7 years and 2 months and the objective seriousness of the three offences viewed as a composite, and the need to disturb that sentence in order that the principles of denunciation, punishment and general deterrence are highlighted and that a sentence that is plainly unjust as to amount to an affront to the administration of justice is set aside.

11. [136]

    Mr Walker submitted that the Director’s central contention that the undiscounted sentences for each of the three offences fell below what the Director describes as “an available range” was, notably, unsupported by the Director inviting the Court to consider any comparative cases. [34] Mr Walker also emphasised, and in my view correctly, that the so-called starting point or undiscounted sentence nominated by the sentencing judge in the process of structuring a sentencing order necessarily incorporates factors that operate in mitigation of sentence. He described Mr Rostankovski’s subjective circumstances as compelling, emphasising that they were not the subject of any challenge by the Director either at first instance or in this Court.

12. [137]

    Issue was also taken with the Director’s submission that there was minimal overlapping criminality in the offending comprehended by the money laundering offence and the blackmail offence when, as was appropriately recognised by the sentencing judge, they were closely linked contextually and where the money laundering offence was wholly contingent upon the blackmail monies being paid by the Plutus conspirators.

13. [138]

    Mr Walker also submitted (again, in my view, with some force) that against the relatively low maximum penalty of 5 years imprisonment for the aid and abet fraud offence, a discounted sentence of 1 year and 7 months, into which was factored the weight of Mr Rostankovski’s subjective circumstances, including the sentencing judge’s finding that psychological factors played a role in his commission of that offence, was not eloquent of latent error in the exercise of a broad sentencing discretion.

14. [139]

    Given the discretion of the sentencing judge in endeavouring to synthesise competing or contradictory factors in determining the length of the effective sentence of full-time imprisonment and the minimum period Mr Rostankovski should serve in custody before being eligible to be released to parole, Mr Walker submitted the Crown had failed to demonstrate that an effective sentence of 10 years and 5 months with a non-parole period of 7 years and 2 months, comprehending both the totality of the respondent’s offending and the weight of his subjective case, is manifestly inadequate in the sense that it could fairly be described as wrong or plainly unjust or an afront to the administration of justice.

15. [140]

    I accept those submissions. Although the aggregate sentence of 8 years imprisonment ultimately imposed for the two Commonwealth offences has the appearance or suggestion of latent error, particularly when, in the anterior process of aggregation 10 years was appointed, having determined, for the reasons set out above, that the first ground of the Crown appeal which alleged a patent error of sentencing principle in the application of totality principles (in large part focusing on that 8 year aggregate sentence) has not been made out, I am unprepared to find that latent error has infected the sentencing discretion.

16. [141]

    I will have something further to say about the Director’s failure to cite any comparative cases when dealing with the challenge to Mr Hausman’s sentence for the money laundering offence.

17. [142]

    The Director did not challenge the undiscounted sentence of 15 years imprisonment for the money laundering offence or the discounted sentence of 7 years and 6 months. [35]

18. [143]

    The Director’s challenge was limited to the sentence of 5 years ultimately imposed for that offence when assessed against the maximum penalty of 25 years imprisonment. The Director submitted that the objective seriousness of Mr Hausman’s offending as party to the joint criminal enterprise to launder the proceeds of the blackmail offence, assessed by the sentencing judge as well above the mid-range and towards the high end of the range for offending of that kind on the basis that Mr Hausman was found to be the architect of the money laundering scheme in which he directed others and used associates to facilitate the movement and investment of the blackmail monies into Australian and overseas accounts, necessitated that the discounted sentence of 7 years and 6 months was not adjusted further and that to reduce that sentence to 5 years without any explanation amounted to a latent error warranting the intervention of this Court.

19. [144]

    The Director also submitted that the significant degree of concurrency between the discounted sentences of 5 years ultimately imposed for both the money laundering offence and the blackmail offence, resulting in a total effective head sentence of 8 years with a non-parole period of 6 years, failed to adequately reflect the totality of Mr Hausman’s criminality. The Director submitted that of the two offences, although sequential in the sense that the money laundering offence could not have been committed but for the commission of the blackmail offence, the money laundering offence continued for a significant period after the objective of the blackmail had been achieved and, in that sense, the offences were separate and distinct episodes of objectively serious criminality which were inadequately reflected in the effective sentence imposed.

20. [145]

    The Director repeated the submissions advanced in support of its appeal against the inadequacy of Mr Rostankovski’s sentence set out above at [131] and following, including that this Court’s discretion to intervene and set aside Mr Hausman’s sentence is engaged to ensure that an unjust sentence is not left undisturbed.

21. [146]

    Mr English’s submissions were, unsurprisingly, not dissimilar to those advanced on behalf of Mr Rostankovski.

22. [147]

    In his written submissions he repeated the generalised complaint made by Mr Walker in oral argument that the Director had failed to cite any comparable cases which might have allowed this Court to trace the limits of the available range of sentences for the offence of money laundering, in order to consider the Director’s submission that the sentence of 5 years imprisonment imposed on Mr Hausman was so far below the range of sentences that could be justly imposed for offending of the kind committed by him as to warrant this Court’s intervention.

23. [148]

    In contrast, Mr English offered an analysis of a number of sentencing decisions which involved a contravention of s 400.3(1) of the Criminal Code or a conspiracy to commit the offence. He submitted that those cases, set out below, supported the proposition he advanced that a pre-discount starting point of 15 years imprisonment for the money laundering offence (ultimately lowered to 5 years on account of totality in the ultimate sentencing order) was not so far below the range of sentences that could be justly imposed as might warrant this Court’s intervention. [36]

24. [149]

    It has been repeatedly stated that consistency in sentencing is not demonstrated by numerical equivalence but is the product of the consistent application of relevant sentencing principles. [37] Although the cases cited by Mr English produce only a broad indication of the approach of sentencing courts to serious contraventions s 400.3(1) of the Criminal Code, they have been of some assistance in allowing me to meaningfully compare what the sentencing judge found Mr Hausman did in the commission of the offence, including the quantum of the money laundered and the extent of planning that was entailed in the commission of that offence and, to a limited extent, the relative subjective circumstances of other offenders. In the result, I accept that an undiscounted head sentence of 15 years, although not identical to the sentences imposed upon other offenders, is not so markedly different from them to enable me to find that it is so far outside the range of available sentences to constitute a sentencing error.

25. [150]

    Neither am I persuaded that there has been an excessive allowance for totality in the appointment of an effective head sentence of 8 years with a non-parole period of 6 years such as might enliven this Court’s discretion to intervene to vary that sentence.

26. [151]

    The essence of the second ground of the Director’s appeal against the sentence imposed upon Mr Hausman is the contention that in discharging his obligation in Part IB of the Crimes Act (Cth) and Part 3 of the Crimes (Sentencing Procedure) Act (NSW) to specify the sentences that would have been imposed were it not for Mr Hausman’s assistance to the authorities, the sentencing judge erroneously adopted the sentences of 5 years he imposed for each of the Commonwealth and State offences as the point of reference.

27. [152]

    In the Director’s submission there can be no question from the concluding paragraphs of the sentencing order which I have set out in full above and which I extract again below, that the sentencing judge took that approach. The only question is whether that was an error which this Court should correct.

28. [153]

    Sections 16AC(1) and (4) of the Crimes Act (Cth) (set out below) provide for what a sentencing court is to do when sentencing an offender who has undertaken to cooperate with law enforcement agencies, and what is to occur where an offender has failed, in whole or in part, to comply with that undertaking without reasonable excuse. Where there has been a complete failure to comply with an undertaking the original sentence is to be restored if the failure to comply is in part only, any substituted sentence is a matter for the sentencing court in the exercise of discretion. [38]

29. [154]

    The Director submitted that on a proper construction of s 16AC(1) and (2) the reference point for calculation of the “but for” figure that was to apply to the money laundering offence was not the 5 years the sentencing judge imposed for that offence after application of totality considerations but the undiscounted sentence of 15 years. After a combined discount of 50% was applied to that sentence to account for Mr Hausman’s plea of guilty and his past and future assistance to the authorities, the sentence reduced to 7 years and 5 months and, after a final accounting for totality, a sentence of 5 years was imposed. In the Director’s analysis, but for 20% of the 50% discount being applied to the 15 year head sentence to reflect Mr Hausman’s undertaking to assist the authorities in the future he would have been sentenced to 10 years and 6 months, that is, a sentence of 15 years discounted by 5% for past assistance and 25% for the plea of guilty.

30. [155]

    Under the equivalent provision in s 23(4) of the Crimes (Sentencing Procedure) Act (NSW) (set out below) according to which the sentencing judge was required to “state the penalty [for the blackmail offence] that it would otherwise have imposed” absent his assistance, in the Director’s submission the reference point for calculation of the “but for” figure was the undiscounted sentence of 10 years such that the sentence that would have been imposed but for past and future assistance (calculated at 25%) was 7 years and 6 months.

31. [156]

    Section 23(4) provides as follows:

32. [157]

    Mr English submitted that the Director has taken an overly rigid and mathematical approach to the construction of the operating provisions under both sentencing regimes. In his submission, the authorities to which he referred the Court suggest that there is a degree of flexibility in the way a sentencing judge discharges the obligation under both ss 24(4)(b) of the Crimes (Sentencing Procedure) Act (NSW) and s 16AC(2)(b) of the Crimes Act (Cth) to state the penalty that would otherwise have been imposed on an offender, and a corresponding measure of discretion were an offender to fail to comply with an undertaking to give evidence, in Mr Hausman’s case against two co-offenders in their pending trials.

33. [158]

    Mr English submitted it would have been inappropriate for the sentencing judge to have used the undiscounted head sentences of 15 years and 10 years as reference points, the approach contended for by the Director on the appeal. He submitted the appropriate approach is for the sentencing judge to nominate the sentence or the penalty that would otherwise be imposed disregarding only an offender’s undertaking to assist to authorities and the discount that has been applied for that reason. In his submission, given the structure of the sentencing order as it applied to both offences, the appropriate reference point was in fact the sentences of 5 years.

34. [159]

    The cases to which Mr English referred [39] confirm that the quantification of the sentencing discount for an offender’s assistance to authorities is in the discretion of the sentencing judge. They do not, however, support the proposition that having appointed (or allowed for) that discount, application of the “but for” test as it arises under both sentencing statutes admits of any further calculation as a matter of sentencing discretion.

35. [160]

    I am satisfied the error the subject of the Director’s second ground of appeal is made out. It will be obvious from the orders I propose in the ultimate disposition of the Director’s appeal and Mr Hausman’s severity appeal as concerns s 23(4) of the Crimes (Sentencing Procedure) Act (NSW) that the error can be corrected by a recasting of the concluding paragraphs of the sentencing order without any alteration to the effective sentence.

Mr Hausman’s application for leave to appeal

1. [161]

   The applicant complains about a marked and unjustifiable disparity between his undiscounted sentence of 10 years for the blackmail offence and 15 years for the money laundering offence when compared with Mr Rostankovski’s undiscounted sentences of 6 years and 11 years and 10 months, respectively, for the same offences.

2. [162]

   I accept the submission advanced by Mr English that since Mr Hausman was entitled to a combined discount of 50% in contrast to Mr Rostankovski who was entitled to a discount of 20% limited to his pleas of guilty, when considering whether, as a matter of substance rather than form, a complaint about disparity is made out it is the starting point (or undiscounted sentence) that is the focus. There was no submission from the Director that any other approach should be taken.

3. [163]

   Mr English advanced the further submission that this Court would be satisfied that the sentencing judge’s failure to give proper effect to the parity principle is demonstrated by the “relative similarity” between an effective sentence imposed on Mr Hausman of 8 years with a 6-year non-parole period (derived after application of a combined discount of 50% with 25% of the discount attributed to his willingness to assist the authorities) compared with an effective head sentence of 10 years and 5 months with a non-parole period of 7 years and 2 months imposed on Mr Rostankovski who did not assist the authorities and who was also sentenced for the additional offence of aiding and abetting the tax fraud.

4. [164]

   Mr English also submitted that inconsistency in the sentencing judge’s appointment of the ratio between the head sentence and non-parole periods (in Mr Hausman’s case a ratio of 75% compared to 68.8% in Mr Rostankovski’s case) also added to Mr Hausman’s justifiable sense of grievance.

5. [165]

   In short, Mr Hausman submitted that in circumstances where the offences for which he was sentenced were committed by him in the course of a joint criminal enterprise with Mr Rostankovski, the degree of disparity between the undiscounted sentences for both offences and between the overall effective sentences was not justified in the exercise of the sentencing judge’s discretion. That submission was supported, in part, by the contention that the sentencing judge’s findings of Mr Hausman’s relative greater criminal culpability because of what the sentencing judge found was the leading role he played as the architect of the money laundering scheme was not justified and that, in material respects, that finding was inconsistent with the facts agreed for sentencing purposes. In addition, at least insofar as the blackmail offence is concerned, Mr English drew the Court’s attention to the fact that the Crown on sentence submitted that although Mr Hausman’s criminality was “somewhat higher” than that of Mr Rostankovski’s it was not “significantly higher”.

6. [166]

   The position taken by the Director relieves this Court of the need to restate at any length the way in which parity considerations apply when co-offenders are sentenced. Suffice to emphasise that the principle of parity is founded on the notion of equal justice which in broad terms requires that “like offenders be treated in a like manner”. [40] It is well recognised that differences in the sentences imposed on co-offenders may be justified on the basis of their different degrees of culpability or material differences in their subjective circumstances. [41] Where differences of that kind exist (most usually emerging from the facts found for sentencing purposes) the differences in the sentences imposed on co-offenders will not violate the notion of equal justice.

7. [167]

   Ultimately, the test to be applied when there is a claim of unjustifiable or marked disparity is objective. It obliges the applicant to establish that the degree of disparity contended for was not open to the sentencing judge in the exercise of a broad sentencing discretion. Where disparity of that kind is revealed, it will most usually be productive of an appearance of injustice or unfairness, the avoidance or elimination of which is critical to the administration of criminal justice

8. [168]

   The Director’s position, as expressed in the written submissions, was that absent the issues raised by the Crown appeal (where, in the Director’s submission, multiple errors in the structuring of the sentences made comparative analysis for the purposes of the application of parity principle of limited assistance) it was appropriate to concede that the disparity of 4 years between the undiscounted sentence of 10 years for Mr Hausman and 6 years for Mr Rostankovski for the blackmail offence did give rise to a justifiable sense of grievance in Mr Hausman.

9. [169]

   However, that concession was made in qualified terms. It was the Director’s primary submission that the Crown appeal will be upheld and that in the resentencing exercise this Court would also find material differences in the relative culpability of the respondents, but that the Court would moderate the disparity between their undiscounted sentences for the blackmail offence to reflect the fact that Mr Hausman’s criminality in the joint criminal enterprise to blackmail the Plutus conspirators, while “somewhat higher” than that of Mr Rostankovski, also needed to take account of the fact that they had both participated in planning for its success.

10. [170]

    The Director did not make the same concession with respect to the undiscounted sentences for the money laundering offence. In the Director’s submission, the difference in the undiscounted sentences of 15 years for Mr Hausman and 11 years and 10 months for Mr Rostankovski was justified by additional features of Mr Hausman’s offending which elevated his moral culpability for that offence, in particular what the sentencing judge was satisfied was the lead role he played as the architect of the scheme, including engaging Mr Chalabian and providing him with instructions for the disbursement of the monies received from the Plutus conspirators, albeit, ultimately, with Mr Rostankovski’s agreement.

11. [171]

    Since the Director concedes error in the application of parity principles (at least insofar as concerns the undiscounted sentence for the blackmail offence) the first ground of Mr Hausman’s application for leave against sentence is made out. I am not persuaded that there is a parity error infecting the undiscounted sentences for the money laundering offence. In my view, the sentencing judge’s findings as to the differences in the relative culpability of the offenders was open to him. For my part, I would not have come to any different view. Neither am I satisfied that any of the factual errors sought to be attributed to the sentencing judge in the fact-finding exercise according to which he attributed a far greater role to Mr Housman in the commission of that offence (including that the objective seriousness of his offending exceeded that of Mr Rostankovski) have been demonstrated.

12. [172]

    Since the first ground of appeal is made out, albeit in part, this Court is obliged to consider Mr Hausman’s sentence afresh, in accordance with the decision in Kentwell v The Queen. [42] The remaining grounds of appeal should be considered before doing so.

13. [173]

    In support of this ground of appeal it was submitted that although the sentencing judge expressly stated that a finding of special circumstances specific to the blackmail offence would apply with “the same proportion” to the money laundering offence (a non-parole period of 3 years ultimately being fixed against a sentence of 5 years for each offence) that 60% ratio was not preserved in the process of the sentencing judge ultimately imposing an effective head sentence of 8 years with a non-parole period of 6 years.

14. [174]

    The applicant submitted that the ratio of 75% between the effective non-parole period and head sentence reflected a failure on the part of the sentencing judge to give effect to his express finding that the applicant should serve a longer period on parole given his concern that Mr Hausman’s rehabilitation may be hindered by the failure to provide him with treatment in custody and, in addition, because of hardship to his family.

15. [175]

    In Woods v R [2020] NSWCCA 219, the Court dealt with a similar argument involving sentences for both State and federal offences, where the sentencing judge’s finding of special circumstances in respect of a State offence (for the purposes of s 44 of the Crimes (Sentencing Procedure) Act (NSW) was said to have been overlooked when the sentencing order was made.

16. [176]

    In that case, Wright J, with whom Bathurst CJ and Garling J agreed, stated at [62]-[63]:

17. [177]

    It is clear that when making the ultimate sentence in order the sentencing judge followed through with his earlier stated intention that the non-parole period for the Commonwealth offence of money laundering should reflect the alteration in the ratio between the non-parole period and the balance of term for the state offence of blackmail. It is less clear however whether after the sentencing judge made the final adjustment to the sentence in application of totality principles (an adjustment which resulted in an effective sentence of 8 years imprisonment with a non-parole period of 6 years) his failure to preserve the ratio between the head sentence and the non-parole period imposed was a matter of miscalculation or inadvertence as distinct from His Honour determining at that time that the appropriate minimum period Mr Hausman should serve in custody for two serious criminal offences should be 6 years.

18. [178]

    Given the close consideration the sentencing judge gave to the structure of Mr Hausman’s sentence, and the synthesising of competing considerations entailed in arriving at the sentence ultimately imposed, I am not satisfied that an effective non-parole period of 6 years relative to a head sentence of 8 years (a ratio of 75%) was the result of inadvertence or miscalculation on the part of the sentencing judge.

19. [179]

    I would dismiss Mr Hausman’s second ground of appeal.

Ground 3: The sentence for the blackmail offence was manifestly excessive resulting in an overall sentence that was manifestly excessive.

1. [180]

   Although Mr English accepted that the fundamental question raised by the third ground of appeal is whether the sentence ultimately imposed for the blackmail offence is manifestly excessive, he also submitted that where, as here, there was no issue between the parties that the combined discount for assistance and the early plea of guilty was correctly calculated at 50%, it is open to him to make good his contention that the blackmail offence is manifestly excessive by focusing on the undiscounted sentence.

2. [181]

   He submitted that even accepting the sentencing judge’s finding that Mr Hausman’s criminality was well above the mid-range of objective seriousness, when his very favourable subjective case is taken into consideration, an undiscounted sentence of 10 years imprisonment against a maximum penalty of 14 years was unreasonable and plainly unjust. In his submission where the serious indictable offence the subject of the demand with menaces was a tax fraud, and where the co-conspirators were prepared, without apparent hesitation, to pay the monies demanded of them, in effect because they could be readily absorbed as “an expense” associated with the continuing tax fraud, an undiscounted sentence of 10 years is manifestly excessive.

3. [182]

   In circumstances where the discounted sentence of 5 years for the blackmail offence represented a significant portion of the total effective sentence, Mr English submitted that if the sentence for that offence is found to be manifestly excessive it follows that the total sentence is infected by the same latent error.

4. [183]

   The Director submitted that both the undiscounted sentence for the blackmail offence and the sentence ultimately imposed after the combined discount of 50% was applied were within the discretion of the sentencing judge. The Director submitted that the challenge to the undiscounted sentence for the blackmail offence on the basis that the co-conspirators to the tax fraud were willing to submit to the demands made of them in order that their criminal offending might continue is not to the point. The Director submitted that it was open to the sentencing judge to find that it was that state of affairs which gave both offenders critical leverage when making the first blackmail demand and that the same state of affairs motivated Mr Hausman to make the second blackmail demand.

5. [184]

   Finally, the Director submitted that this Court should be wary of accepting the submission advanced by the applicant that the victims of a blackmail are less deserving of protection from demands of the kind made in this case because of their own criminal offending, or that they would for that reason be less likely to make a complaint to police. In the Director’s submission that would undermine the principle of general deterrence.

6. [185]

   In McCarthy v R (2011) 206 A Crim R 131 at [64], the Court held that to take into account as a mitigating feature the fact that victims (in that case of robbery and break and enter) were persons involved in criminal activities is “a fundamental error of principle and contrary to one of the basic aims of the criminal law”. The relevance of that fact is merely that the offender took advantage of the fact that his victims would not complain to the police.

7. [186]

   Furthermore, even if the impact of the threats might have been reduced because the victims were themselves criminals, that fact must be balanced against other relevant matters including the amount of money extracted by the threats, the period of time over which the threats were made (including the rolled-up nature of the offence involving two threats, which escalated), the seriousness of the fraud alleged against the victims and the degree of planning and premeditation. [43]

8. [187]

   I would reject the third ground of appeal.

Mr Rostankovski’s application for leave to appeal his sentence

1. [188]

   I agree with Hamill J that Mr Rostankovski should be granted leave to appeal his sentence but that the appeal should be dismissed.

2. [189]

   I agree also with his Honour’s reasons set out in his judgment at [223]-[271] below for so finding.

The question of Mr Hausman being resentenced

1. [190]

   Mr Hausman relied upon an affidavit sworn by him and dated 17 September 2021 in support of his submission that in the event that the one or more of his three grounds of appeal are made out, and the Court is satisfied that error has been demonstrated, a lesser effective sentence is warranted in law, the Court would structure the sentence by appointing an undiscounted sentence for both offences less than the undiscounted sentences appointed by the sentencing judge and adjust the effective sentence to reflect that fact.

2. [191]

   The affidavit addresses in general terms the conditions of his current custody. As at the date of swearing the affidavit, he was in protective custody which entails limited contact with other inmates and disentitles him from participating in customer-focused courses or work within prison.

3. [192]

   He gives evidence that his physical health is monitored with medication as is his mental health and that his blood sugar levels are also monitored.

4. [193]

   He complains about the quality of the food he receives as an inmate which has resulted in rapid weight loss and dehydration. I note that on one occasion he was hospitalised due to ill health.

5. [194]

   I note that the impact of COVID-19 has limited his face-to-face contact with his partner and children to the extent that since June 2021 his contact with his family is via a video link once a week.

6. [195]

   Whilst not irrelevant to the question of resentence I am not of the view that the affidavit evidence supports a conclusion that a lesser effective sentence than that imposed by the sentencing judge is warranted.

7. [196]

   In considering Mr English’s submission that it would be open to this Court in considering the sentencing discretion afresh to appoint undiscounted sentences for both offences less than those appointed by the sentencing judge (namely less than the sentence of 10 years for the blackmail offence and 15 years for the money laundering offence), I have undertaken a review of the evidence tendered before the sentencing judge. I am satisfied that the findings of fact made by the sentencing judge comprehensively set out in the sentencing judgment and reproduced, in summary, in this judgment are well supported by the evidence. I am also of the opinion that the objective seriousness of Mr Hausman’s offending in the joint criminal enterprise in which he participated was fairly appointed by the sentencing judge.

8. [197]

   In those circumstances, taking into consideration Mr Hausman’s subjective circumstances, I would also appoint 15 years against a maximum sentence of 25 years imprisonment as the undiscounted sentence for the money laundering offence.

9. [198]

   However, since the Director has conceded that there was an unjustifiable disparity between the undiscounted sentence of 10 years for Mr Hausman’s offending in his commission of the blackmail offence (as tempered by his subjective circumstances) and the sentence of six years the sentencing judge nominated as the “starting point” for Mr Rostankovski commission of the same offence (also tempered by his subjective circumstances) on resentence it is appropriate that there be should be some moderation to the undiscounted sentence of 10 years.

10. [199]

    I am of the opinion that an undiscounted sentence of eight years and six months is appropriate.

11. [200]

    That does not, however, lead inevitably to the conclusion that, after the application of a 50% discount, resulting in a discounted sentence of four years and three months for the blackmail offence, any lesser sentence than the total effective sentence of eight years with the non-parole period of six years imposed by the sentencing judge is warranted in law.

12. [201]

    I have come to that conclusion principally because I consider that the sentencing judge made a generous allowance for totality considerations in his ultimate sentencing order which, while open to him, is not an approach I would take. Although I was not persuaded by the Director that the sentencing judge had committed a sentencing error in his approach, I regard his Honour’s allowance for totality as generous, in part at least by the approach he took to the structure of the sentence and his appointment of the commencement dates for each of the sentences which provided for a measure of additional concurrency.

13. [202]

    I accept that where a parity error is either conceded or established it will almost inevitably lead to a reduction in sentence in order that the principle of equal justice is afforded the respect that it deserves as a fundamental sentencing principle. However, in the complex and somewhat unusual circumstances of this case I am confidently of the view that any lesser effective sentence than that imposed on Mr Hausman by the sentencing judge is not warranted.

14. [203]

    Since I am also of the view that the sentencing judge erred in the way he expressed the ultimate sentencing order, both in regards to the sentence that would have been imposed for blackmail offence and the money laundering offence but for Mr Hausman’s assistance to the authorities, in effect, by error in the appointment of the undiscounted sentence for both offences, the correct reference point for application of s 16AC(3) of the Crimes Act (Cth) and s 23(4) of the Crimes (Sentencing Procedure) Act (NSW), it will be necessary to quash and restate that part of the sentencing order to correct that error. In doing so, however, the undiscounted sentence for the blackmail offence will be 8 years and 6 months and not the 10 years appointed by the sentencing judge.

Orders

1. [204]

   I propose the following orders:

2. [205]

   R v Rostankovski

   1. (1)

      The Director’s appeal against the sentence imposed on Mr Rostankovski be dismissed.

3. [206]

   R v Hausman

   1. (1)

      The Director’s appeal against the sentence imposed on Mr Hausman be dismissed except to vary the sentencing order made by Abadee DCJ on 1 April 2021 in the following limited respect:

4. [207]

   In every other respect, the sentence imposed by Abadee DCJ is confirmed.

5. [208]

   Hausman v R

   1. (1)

      Grant leave to appeal.

   2. (2)

      Appeal dismissed.

6. [209]

   Rostankovski v R

   1. (1)

      Grant leave to appeal.

   2. (2)

      Appeal dismissed.

7. [210]

   ADAMSON J: I have had the considerable benefit of reading the respective reasons of Fullerton and Hamill JJ in draft. I agree with the orders their Honours propose, substantially for the reasons expressed, and wish to add only the following brief observations.

8. [211]

   The sentencing judge’s reasons were unorthodox in that they articulated, in considerably more detail than is usual, the iterative process undertaken by his Honour in making allowance for various sentencing considerations, including the principle of totality. Further, his Honour’s expressions, including “notional net effective term of 12 years imprisonment”, required close analysis to ascertain their meaning and effect. However, the task of this Court is to determine whether there is an error of substance which has affected the sentencing discretion. Although some formulations have become widespread, the words used to describe the process of sentencing differ from judge to judge. I agree with Fullerton J’s analysis of the first ground of the Director’s appeal and with her Honour’s conclusion that the ground has not been made out in respect of either offender.

9. [212]

   Further, the task of structuring an overall sentence when sentences must be imposed for State and Commonwealth sentences can be a difficult one. As has been observed by Fullerton J, the sentencing judge appears to have misunderstood the Director’s submission in the Court below as to the requirements of s 19(3) of the Crimes Act 1914 (Cth). Had the sentencing judge appreciated that it was open to him to backdate the sentence imposed on Mr Hausmann for the money laundering offence such that it commenced during the non-parole period for the blackmail offence, the process may well have proceeded, and been expressed, in a more straightforward fashion.

10. [213]

    I am not persuaded that the effective sentences imposed on the offenders are manifestly inadequate, although I consider the sentences imposed to be at the bottom of the permissible range.

11. [214]

    This Court is required to re-sentence by reason of established or admitted error (relating to parity, resulting in a justified sense of grievance in the case of Mr Hausman for the sentence imposed for blackmail and error in taking character into account in the case of Mr Rostankovski). The sentencing discretion is required to be exercised afresh: Kentwell v The Queen (2014) 252 CLR 601; [2014] HCA 37. However, since the Crown appeal is not to be allowed (except to the limited extent referred to by Fullerton J at [165]), it is necessary to revisit the original effective sentences to ensure that the proposed effective resentences do not exceed those originally imposed: Parker v Director of Public Prosecutions (1992) 28 NSWLR 282 at 290: see Simpson J’s consideration of the issue in Davis v R [2015] NSWCCA 90 at [79]-[84]. I have undertaken that exercise.

12. [215]

    I am persuaded, for the reasons given by Fullerton J, that Mr Hausman’s justifiable grievance on parity grounds ought be remedied by a reduction in the sentence imposed on him for the blackmail offence but that it ought not affect his total effective sentence.

13. [216]

    In resentencing each offender, I would, but for the constraint referred to above, impose an effective sentence that would exceed that imposed by the sentencing judge.

14. [217]

    In these circumstances, I am not persuaded that any lesser effective sentence is warranted in law in respect of either Mr Hausmann or Mr Rostankovski: that is, I regard the respective effective sentences imposed as at the lowest end of the available range for the offending, having regard to all relevant matters.

15. [218]

    For these reasons, I agree with the proposed orders.

16. [219]

    HAMILL J: I have the considerable advantage of having read the Judgment of the presiding Judge in draft form. The clarity and detail of her Honour’s judgment relieve me of the need to revisit the factual circumstances of this difficult and somewhat complicated case.

Concurrence with Fullerton J

1. [220]

   I agree with Fullerton J that the Director’s appeals against the asserted inadequacy of the sentences must be dismissed, except to the limited extent relating to ground 2 (in Mr Hausman’s case) as explained by Fullerton J at [156]-[165] and in her Honour’s re-structuring of the sentence. I also agree with her Honour’s reasons for that conclusion. While the sentencing Judge approached the issue of totality in a somewhat unorthodox manner, he correctly applied the relevant principles. The authorities referred to by Fullerton J establish that there is no inflexible rule as to how the totality principle is to be applied in any given case, especially one with the complications involved here. As to the assertion that the sentences were manifestly inadequate, I accept that the total effective sentences were at the very low end of any “range” that might have been expected given the gravity of the criminality involved in the case of each of the offenders. However, when account is taken of the individual circumstances of the two men and consideration is given to the undiscounted starting points of the sentences and their accumulated effect, it cannot reasonably be concluded that the sentences were plainly wrong or unjust.

2. [221]

   I also agree with Fullerton J’s approach to Mr Hausman’s application for leave to appeal against the sentence imposed on him. I can discern little merit in the second and third grounds, for the reasons given by Fullerton J. I agree with Fullerton J that the parity ground is meritorious in terms of a bare comparison between the undiscounted sentence imposed on the two men for the blackmail offence. So much was essentially conceded by the Director. However, as Fullerton J explains, the approach taken by the sentencing Judge to the issue of totality and the extent to which the sentences were ordered to be served concurrently resulted in the disparity in the total effective sentence not being such as to warrant appellant intervention. In other words, once the re-sentencing exercise is undertaken in accordance with the approach explained by Fullerton J, there is no remaining justifiable sense of grievance in terms of the total sentence imposed on the two men. That conclusion may be different if the Court intervened to reduce Mr Rostanovski’s sentence, the matter to which I now turn. Subject to that issue, I agree that Mr Hausman’s appeal against sentence should be dismissed although, clearly enough, leave to appeal should be granted.

Mr Rostankovski’s application for leave to appeal his sentence

1. [222]

   As Fullerton J has observed, Mr Rostankovski filed a notice of intention to appeal on 9 April 2021 and a single ground of appeal was notified on 14 July 2021 in the following terms:

2. [223]

   Mr Rostankovski accepted that the sentencing Judge was correct to find that “denunciation, punishment and general deterrence” are “especially important” in “tax fraud cases”. However, he submitted that the Judge erred by diminishing the weight given to his prior good character and lack of criminal history on the basis of a finding that “his prior good character contributed to the commissioning of the aiding and abetting offence”. Similarly, it was put that his Honour erred in finding that “the [Prosecutor’s] point about prior good character assisting in the accumulation of profit by illegal means retains force”. At the heart of the submission was the contention there was no evidence that Mr Rostankovski’s good character played any part in his ability to commit the offences to which he pleaded guilty.

3. [224]

   The Director submitted that the approach taken by the sentencing Judge did no more than apply established authority to the facts of the case and that his Honour “was entitled to give less weight to prior good character on the basis of the seriousness of the offences, the importance of general deterrence, the frequency with which offences of tax fraud and money laundering are committed by persons of good character and the pattern of repeat offending over a significant period of time.” The Director relied on a submission that the sentencing Judge indicated that his decision to give less weight to the good character applied “especially so for the aid and abet fraud offence” and that the Judge did not treat the good character as “an aggravating feature” but rather as a “mitigating feature, albeit the degree of mitigation was lessened”.

4. [225]

   Mr Rostankovski’s submissions under this ground must be accepted and the Court should consider the sentence imposed on him afresh in accordance with the decision in Kentwell v the Queen (2014) 252 CLR 601; [2014] HCA 37, in order to determine whether, pursuant to s 6(3) of the Criminal Appeal Act 1912 (NSW), his appeal against sentence should be allowed.

5. [226]

   The relevant Commonwealth provisions are in s 16A of the Crimes Act 1914 (Cth). Section 16A(2) provides a non-exhaustive list of matters that must be taken into account in determining an appropriate sentence. Section 16A(2)(m) refers to “(m) the character, antecedents, age, means and physical or mental condition of the person”. Sub-paragraph (n) refers to the prospects of rehabilitation, a matter often informed by the existence or absence of a history of offending. The Director referred to sub-para (ma) which provides:

6. [227]

   The Director acknowledged that this provision was inserted by the Crimes Legislation Amendment (Sexual Crimes Against Children and Community Protection Measure) Act 2020 (Cth) and came into force after the offending and had no application. However, it was suggested “it may be helpful in elucidating that prior good character was not treated as an aggravating feature”.

7. [228]

   Section 16A(2)(ma) is of no relevance to an assessment of this ground. It is self-evident that that a person of good character with no previous criminal antecedents should generally have those matters taken into account as mitigating features. There may be exceptions to that general proposition as the following analysis demonstrates, but the starting point is that a person with no criminal history, or a person of prior good character, is entitled to expect a less severe sentence than a recidivist offender.

8. [229]

   Turning to relevant New South Wales legislation, s 21A of the Crimes (Sentencing Procedure) Act 1999 (NSW) provides a list of aggravating and mitigating features. Sub-section (2) provides a list of aggravating factors including:

9. [230]

   Within its non-exhaustive list of mitigating factors, sub-s (3) of s 21A provides:

10. [231]

    Sub-paragraphs (e) and (f) are obviously of particular significance but, as suggested above, a clean record and prior good character are also matters that might inform an assessment of the likelihood that the offender may re-offend and whether they have good prospects of rehabilitation.

11. [232]

    Section 21A(5A) provides:

12. [233]

    Like the provision in s 16A(2)(ma) of the Crimes Act (Cth), this provision was amended to deny mitigation to child sex offenders who use their position of trust arising from their good character and standing in the community to facilitate their offending. It has no relevance in the present case and neither party suggested that it did. It is included here for completeness and to contrast the situation that applies in the present case. Unless there is an exception arising from past authorities, or some other good reason, Mr Rostankovski’s good character and absence of prior convictions are relevant and potentially important considerations in the sentencing exercise.

13. [234]

    There are several circumstances where it has been held that an offender’s prior good character may receive less weight and, perhaps in an extreme case, be disregarded. Some of the cases were summarised by the parties in their written submissions. In R v Kennedy [2000] NSWCCA 527 Howie J (with whom Simpson J, as her Honour then was, agreed) said at [21]:

14. [235]

    Howie J continued at [22] by referring to cases “where there is a pattern of repeat offending over a significant period of time”, a circumstance that frequently arises in child sexual assault offences. While R v Kennedy was a decision of a two-member bench, the principles outlined by Howie J are not controversial and were not contested on the hearing. Rather, the issue was whether such principles applied to Mr Rostankovski’s case and whether the sentencing Judge erred in their application.

15. [236]

    By reference to R v Gent [2005] NSWCCA 370 at [55]-[59]; (2005) 162 A Crim R 29 at 42-43, the Director submitted “it is well established that good character carries less weight with respect to certain classes of offences” and identified fraud and money laundering as two such offences because of the need for “denunciation, punishment and general deterrence.” Reliance was placed on the judgments in R v Rivkin (2004) 59 NSWLR 284; [2004] NSWCCA 7 and R v Huang [2007] NSWCCA 259; (2007) 173 A Crim R 370.

16. [237]

    Another kind of offence where it has sometimes been held that the offender’s good character played a role in their ability to commit the offence are those involved in drug trafficking: see, for example, R v Leroy (1984) 2 NSWLR 441 and R v Nguyen [2010] NSWCCA 238; (2010) 205 A Crim R 106. In R v Leroy, Street CJ observed that some offenders in the chain of drug trafficking are selected because their clean records enable them to escape suspicion and detection. Typically, this might involve those chosen to be couriers crossing international borders with large quantities of narcotics.

17. [238]

    Another frequently occurring category of case where this principle may apply involve child sex offenders whose high status or vocation enable them to abuse a position of trust and make it less likely that a victim will complain. Members of the clergy and teachers sometimes fall into this category. An infamous example of such a case is Ryan v The Queen (2001) 206 CLR 267; [2001] HCA 60, at 274 [21] (McHugh J), 288 [69] (Gummow J) and 318 [176] Callinan J. The High Court was divided on the question of whether the repeated sexual offending committed by a priest over many years was such that other evidence of his good works and character ought to be disregarded altogether. Ultimately, a majority (McHugh, Kirby and Callinan JJ; Gummow and Hayne JJ dissenting) upheld the appeal against a decision of this Court confirming the sentencing Judge’s decision that the good character evidence was entitled to no weight. The judgments in Ryan demonstrate that, while general propositions might be stated, those propositions ought not to be applied inflexibly. The matter is one to be determined by the proper application of principle to the particular facts and circumstances of the individual case.

18. [239]

    The same applies to any general proposition to the effect that in cases of “white collar crime” or, to move away from that somewhat slippery label, [44] in cases of fraud and money laundering, there is an inflexible or general proposition that an offender’s good character is entitled to little or no weight as a mitigating factor. It is true that some cases of fraud or money laundering involve the offender using their position of trust, and related good character and repute, to facilitate the commission of the offence. Examples might include company directors, accountants, financial advisers and others whose position makes it easier for the offending to occur. In such cases, the target of the dishonest dealing may be more susceptible to be deceived because of the trusted or apparently exalted position of the offender. In money laundering offences, there may be cases where the principals use the accounts and services of an offender because their good character or lack of criminal record is less likely to arouse suspicion or investigation. This is analogous to the drug mule who is engaged because their lack of prior convictions makes it less likely that they will arouse suspicion at a border or check-point. There was no evidence that Mr Rostankovski’s case involved such features or characteristics.

19. [240]

    Another example of a case where evidence of prior good character or a lack of prior convictions might be disregarded is one where the crime is so heinous that the objective criminality and/or moral culpability is so extreme that it effectively swamps other relevant factors: Ryan v The Queen at 300 (Kirby J). By way of example, a horrific murder committed by an offender with no prior convictions, may result in a life sentence because no punishment other than the maximum penalty can adequately meet the objectives of retribution, punishment, deterrence, and community protection.

20. [241]

    To summarise, and without being prescriptive or exhaustive, the following are instances where the weight afforded to an offender’s good character or lack of criminal antecedents might be reduced:

21. [242]

    The cases that establish the foregoing propositions must be applied with caution and discernment. To state what should be obvious, except for those rare cases that fall into the final category described in the last dot point paragraph, it would be unusual for a first offender and/or person of prior good character to a receive the same punishment as an offender who cannot rely on those features. Further, the propositions and categories discussed are often overlapping, and the application of past authority must be applied by reference to the facts and circumstances of the case before the sentencing court. Little is achieved by placing an offence (or offender) into a category and suggesting that a particular consequence will necessarily follow.

22. [243]

    The applicant was born in May 1989 and was 27 years of age during the period of the offending. He was 31 at the time of sentence. The only matter on his criminal history was an offence of driving while his licence was suspended from 2008 for which he received a 12 month bond without conviction. He was married with two children aged 2 and 5 and tendered an impressive array of testimonials attesting to his good character. These came from family members, school and family friends, work colleagues and others. He had a solid history of employment including during the period of remand and a letter from the company that employed him, with the knowledge of the pending charges, spoke highly of him. There was no dispute that he was a person of good character and the sentencing Judge, having referred to that evidence, said:

23. [244]

    In the part of his written submissions dealing with “Character and antecedents”, Senior Counsel for Mr Rostankovski submitted before the sentencing Judge:

24. [245]

    Under a heading referring to the “Crimes Act [(Cth)], s 16A(2)(f), (m) and (n) and the Crimes (Sentencing Procedure) Act, s 21A(3)(e), (f), (g), (h) and (i)”, the Prosecutor at first instance submitted:

25. [246]

    Reference was made to the decision in R v Rivkin (2004) 59 NSWLR 284; [2004] NSWCCA 7 at [410] where it was said:

26. [247]

    So far as it goes, the passage in R v Rivkin supports the legal principle advanced. However, the present case and the applicant’s circumstances were far removed from those which existed in Mr Rivkin’s case.

27. [248]

    The Prosecutor went on to submit that “the authorities are clear that prior good character is of little weight in sentencing for offences involving sustained and deliberate taxation fraud, which call for a sentence emphasising denunciation, punishment and general deterrence.”

28. [249]

    The sentencing Judge accepted these submissions in the passage of the sentencing judgment that underpins the ground of appeal. In the submissions on appeal, the applicant highlighted the passages of the judgment which are said to contain error:

29. [250]

    I accept Mr Rostankovski’s submission that this passage disclosed error.

30. [251]

    First, there was no evidence to support a finding that Mr Rostankovski’s good character assisted him to commit the offences. Even if that finding was limited to the offence of aiding and abetting the tax fraud (which it was not), the evidence did not support the application of relevant principles allowing for a diminution of the weight to be given to his good character. There was nothing to suggest that Mr Rostankovski’s experience in the industry, his position as a trader, or his good character facilitated his commission of the offence or his interactions with the so called “second tier company directors”. Mr Rostankovski was introduced to those people by a fictitious name (“James”) and, as was submitted, this “shows that he was hardly trading on his good fame, name or character”. Further, the second-tier directors were not innocent dupes or victims of the applicant’s shenanigans. As was put by Mr Walker on the hearing of the appeal “everyone was inside the illicit circle” and the term “second tier directors” was, in the circumstances, “a grandiose expression for people who [understood] that they were to do something that had no substance whatever so far as holding office in the corporation, but to sign when asked and to receive honorariums for no work of any value”.

31. [252]

    Second, the sentencing judgment did not explain adequately how the offender’s good character and standing assisted him to commit the offences, even if it is accepted that the second-tier directors were “vulnerable to the offender’s manipulation”.

32. [253]

    Third, the applicant’s role in the organisation was, on the findings of the sentencing Judge, outside of the “inner circle” and he was generally acting at the direction of others. There was nothing to suggest his skills and qualifications, such as they were, let alone his prior good character assisted him in performing the roles he did.

33. [254]

    The evidence in the present case did not permit the sentencing Judge to conclude that Mr Rostankovski’s good character facilitated the commission of the offences or that it assisted his “manipulation” of the other parties to the tax fraud, let alone the money laundering or blackmail offences. Nor was this a case where the period of offending was of such magnitude that it diminished the evidence of good character in the way suggested by some of the judgments in Ryan v The Queen. I am unable to accept the Director’s submission that the complaint under this ground is ultimately an argument about the “weight” to be given to Mr Rostankovski’s good character. Rather, it is an assertion that a principle of sentencing was misapplied or was applied in circumstances in which it did not properly arise on the evidence.

34. [255]

    The application for leave to appeal should be granted and the Court must consider the question of sentencing afresh in accordance with the decision in Kentwell v The Queen.

35. [256]

    The correct approach to re-sentencing and s 6(3) of the Criminal Appeal Act was described by the High Court in Kentwell v The Queen in the following terms at [43]:

36. [257]

    Simpson J (as her Honour then was) explained this Courts function once error is established in Davis v R [2015] NSWCCA 90 at [79]-[84]:

37. [258]

    Mr Rostankovksi read two affidavits “on the usual basis”, that is, against the possibility that the Court would move to exercise the sentencing discretion afresh:

    1. (1)

       An affidavit of Mr Rostankovski dated 22 September 2021.

    2. (2)

       An affidavit of Jordan Drew Gear, solicitor, dated 22 September 2021.

38. [259]

    The two affidavits and their annexures provide evidence of the conditions imposed on Mr Rostankovski in custody, including his limited access to recreational and educational facilities, the cessation of in-person visits with friends and family, and the deleterious effects of those conditions on his mental health. Like many inmates, the impact of precautions taken by the authorities to prevent the spread of COVID-19 within the gaol system have made the conditions of incarceration more onerous.

39. [260]

    Senior Counsel for Mr Rostankovski invited the Court to take into account the favourable findings made by the sentencing Judge with respect to Mr Rostankovski’s subjective case, including:

    1. (1)

       He is remorseful and contrite.

    2. (2)

       He is very unlikely to re-offend.

    3. (3)

       He enjoys good prospects of rehabilitation.

    4. (4)

       He has developed insight into his offending behaviour.

    5. (5)

       The significance of specific deterrence is somewhat diminished.

40. [261]

    I have taken these matters into account and given appropriate weight to Mr Rostankovski’s good character and lack of criminal record. I have reviewed the evidence tendered on the appeal and given some weight to the onerous conditions of incarceration and Mr Rostankovski’s continued efforts to reform while he has been in custody. His subjective case was, and remains, a strong one. It is entitled to significant weight.

41. [262]

    Against that, the criminality involved in this case was extremely grave. The facts and relevant findings are set out in some detail in the judgment of the presiding Judge at [43] and following.

42. [263]

    Mr Rostankovski was involved in aiding and abetting a massive and highly complex tax fraud involving an amount far exceeding one hundred million dollars. He was involved over a period of 6-7 months and during that time around $50 million was generated by the conspiracy. He was aware that the principal of the scheme benefited in a sum of at least $7.5 million of misappropriated funds. Mr Rostankovski profited in an amount of almost $192,000.

43. [264]

    When he became dissatisfied with his own reward, Mr Rostankovski set about blackmailing the conspirators. The blackmail was carefully planned and executed as summarised by Fullerton J at [54]-[56]. It involved two demands for $5 million and $20 million respectively.

44. [265]

    The money laundering offence related to the proceeds of the blackmail offence. Almost $25 million was paid into the trust account of Mr Chalabian’s law firm between February and May 2017.

45. [266]

    Each of these offences represented planned and sophisticated criminality of a very high order. The sentencing Judge was correct to categorise the blackmail and money laundering offences as well above the mid-range for offences of their kind. While I would not disturb the finding made by Judge Abadee, the assessment of the aid and abet offence as being at about the mid-range was generous given the scale of the offending that Mr Rostankovski facilitated.

46. [267]

    It is unnecessary to express my conclusions as to the appropriate sentence numerically, see: O’Grady v R [2015] NSWCCA 16 at [3] (Bathurst CJ) and the analysis undertaken in RO v R [2019] NSWCCA 183 at [84]-[89] (Beech-Jones J, as his Honour then was) and [118]-[123] (N Adams J). However, having undertaken the exercise afresh, I would have commenced with higher starting points than did the sentencing Judge. I would also have taken a less “generous” approach (to employ the language of the presiding Judge) to the issue of totality in structuring the sentences.

47. [268]

    In terms of the application of s 6(3) of the Criminal Appeal Act, and despite the specific error established, the result is that no lesser sentence is warranted in Mr Rostankovski’s case. That conclusion applies to the aggregate sentence imposed for the two commonwealth offences, the individual sentence imposed for the blackmail offence, and to the total effective sentence.

48. [269]

    The total effective sentence (10 years and 5 months with a non-parole period of 7 years and 2 months) imposed by Judge Abadee was, to adopt the words of Simpson J in Davis v R, at “the very bottom of the available range” [46] for criminality of such magnitude.

49. [270]

    For those reasons, while leave to appeal should be granted, the appeal against sentence must be dismissed.