Chalabian v R

1. [1]

   LEEMING JA: I agree with Fagan J.

2. [2]

   WALTON J: I agree with Fagan J.

3. [3]

   FAGAN J: The applicant seeks leave to appeal against his conviction on a charge that between about 1 February 2017 and about 18 May 2017 he dealt with money in excess of $1 million that was proceeds of crime and that the applicant believed at the time of the dealing to be such proceeds, contrary to s 400.3(1) of the Criminal Code (Cth). The applicant was found guilty of that offence on 21 April 2022 at the conclusion of a trial by jury that had commenced on 21 February 2022.

4. [4]

   The maximum penalty for the offence is 25 years imprisonment and/or a fine of up to 1500 penalty units ($270,000). On 23 June 2022 the trial judge, Johnson J, sentenced the applicant to imprisonment for 12 years commencing that day and expiring on 22 June 2034. A non-parole period of 7 years and 6 months was fixed. The first date on which the applicant will be eligible for release to parole is 22 December 2029. The applicant seeks leave to appeal against that sentence.

5. [5]

   Only two grounds of appeal are pursued, as follows:

Facts

1. [6]

   Throughout the charge period the applicant practised as a solicitor in New South Wales, as he had done for 23 years since his admission in December 1993. He was a principal of the incorporated law practice Lands Legal Pty Ltd. The practice was conducted from offices in York Street, Sydney. It had a trust bank account upon which the applicant was able to effect transactions. At trial, before the first Crown witness was called, a statement of agreed facts was tendered to the jury concerning a conspiracy between persons other than the applicant to defraud the Commonwealth and concerning the blackmail of the conspirators by Daniel Hausman and Daniel Rostankovski. The blackmail payments, totalling $24.2 million, passed through the Lands Legal trust bank account under the control and direction of the applicant. The issue in the trial was whether the applicant believed the funds were proceeds of crime at the time he carried out the trust account transactions.

2. [7]

   The statement of agreed facts before the jury was as follows:

3. [8]

   There was undisputed evidence that between 1 February 2017 and 26 April 2017 a total of $24,244,740 was deposited to the Lands Legal trust bank account in 53 separate deposits, for each of which the transferor was recorded as Plutus Payroll. For 15 of the deposits the description was “ATOPAYGFUNDS” and for the remainder it was “INV BALANCE”. From 28 February 2017 to 18 May 2017 $24,205.416.22 was withdrawn from the account. There were 22 separate transfers to the bank accounts of corporate entities associated with Hausman and $880,000 of the total was transferred to a Hong Kong entity by way of investment for a company associated with the applicant’s mother. It was not disputed that the applicant effected the transfers out of the account, or caused them to be effected, on the instructions of Rostankovski and Hausman and that this constituted dealing with the money for the purposes of the charge.

4. [9]

   It was the Crown case that the $24.2 million deposited to the Lands Legal trust bank account originated from the Plutus conspirators. It was alleged that the money was drawn from the sums received by Plutus Payroll Australia Pty Ltd from its clients, which the clients intended should be applied in payment of wages and by remittance of PAYG Withholding amounts to the ATO. The Crown alleged that the Plutus conspirators fraudulently failed to remit the amounts due to the ATO for PAYG Withholding and that, out of the amounts unlawfully held back from the ATO, they paid the $24.2 million for the benefit of Daniel Rostankovski and Daniel Hausman under duress of the successive blackmails referred to at pars 26 and 29 of the agreed statement of facts. There was evidence from which it was open to the jury to find that the blackmails were communicated by Rostankovski and Hausman on their own initiative and solely in their own interests, not on behalf of or for the benefit of the second-tier directors.

Circumstantial evidence of the applicant’s belief

1. [10]

   There are summarised in the following paragraphs some of the significant circumstances that the Crown relied upon to support an inference that the applicant believed the funds passing through his trust account were proceeds of crime. “Proceeds of crime” is a term defined in s 400.1(1) of the Criminal Code as follows:

2. [11]

   The Crown alleged that the applicant was instructed and retained by Rostankovski and Hausman from December 2016 with respect to the intended deposit of funds into his firm’s trust bank account and withdrawal and disbursement of those funds. The evidence included an intercepted phone conversation between Hausman and the applicant on 18 December 2016 in which Hausman referred to “that discussion we had the other day just about that strategy about the incoming funds”. Hausman raised the possibility of “whether they could send it possibly to a law firm trust account overseas”. The applicant warned that “that might complicate matters ’cause money goes overseas and comes back in it might raise … like the ATO might query it”.

3. [12]

   In that conversation the applicant gave the following advice:

4. [13]

   There was evidence that from 1 February 2017 the applicant played a significant part in negotiating the terms of a draft deed between Plutus Payroll Australia Pty Ltd and seven second tier companies (as referred to at pars 7-9 of the agreed statement of facts). The nominal directors of the second-tier companies were also parties to the deed. Dev Menon had prepared the draft deed on behalf of the Plutus conspirators and he represented them in negotiating and settling its terms. WhatsApp messages from Hausman on 1 February 2017 showed that he gave instructions for the applicant to negotiate the deed and that he nominated one of the directors of the second-tier companies to be the applicant’s purported client. Those messages explicitly stated that Adam Cranston and Jay Onley were “running this labour hire scam” and that “Dev Menon from Clamenz has been covering it up”.

5. [14]

   One of Hausman’s messages on 1 February 2017 included the following:

6. [15]

   In final form the deed was signed on 3 February 2017. It contained a recital to the effect that the second-tier companies were the subject of default assessments for “PAYG Tax” and that the ATO had garnished their bank accounts. The deed provided that Plutus Payroll Australia Pty Ltd would pay to the second-tier companies $5 million by instalments over 10 weeks.

7. [16]

   Rostankovski made the second blackmail demand, on behalf of himself and Hausman, on 15 February 2017: agreed statement of facts par 26. The next day Hausman sent WhatsApp messages to the applicant that included the following:

8. [17]

   In the second half of February 2017 the applicant negotiated with Dev Menon the terms of a deed of variation to the deed that had been signed on 3 February 2017. This provided that the minimum amount payable by Plutus Payroll Australia Pty Ltd to the second-tier companies was increased to $25 million, which was to be paid in full by 9 June 2017. The deed of variation was signed on 6 March 2017.

9. [18]

   On 1 February 2017 and 22 February 2017 the applicant opened files in the names of two of the nominal second-tier directors, by reference to which the deposits to and withdrawals from the trust account were transacted. It was open to the jury to infer that the files in the names of these directors were sham arrangements and that the real clients were Hausman and Rostankovski. The Crown called the second tier directors. It was open to the jury to assess them as unsophisticated individuals, to whom the applicant gave no real advice. On 3 February 2017 the applicant prepared a deed under which one of the directors, Mr Mills, was purportedly appointed as a representative of the others.

The statutory alternatives to the offence charged

1. [19]

   As in force during the charge period, s 400.3 of the Criminal Code created three different offences for dealing in proceeds of crime with a value of $1 million or more, graded according to the degree of culpability reflected in the offender’s state of mind. The relevant subsections were in the following terms:

2. [20]

   The provision for statutory alternatives is as follows:

3. [21]

   Division 400 containing the above provisions also created offences for dealing in proceeds of crime of a value less than $1 million, or of any value, (ss 400.4-400.8) and offences for dealing with property reasonably suspected of being proceeds of crime (s 400.9). However, the learned trial judge directed the jury only as to the possible alternatives of finding the applicant guilty of an offence contrary to s 400.3(2), wherein the relevant mental element is recklessness as to the fact that the money was proceeds of crime, or an offence contrary to s 400.3(3), involving negligence in that regard. It has not been argued on the appeal that any wider range of alternatives should have been left.

Trial directions concerning alternative verdicts

1. [22]

   The contested element of the count charged in the indictment was the applicant’s belief that the large sums passing through his firm’s trust account were proceeds of crime. On 22 February 2022, day 2 of the trial, immediately prior to the Crown’s opening address the learned trial judge provided to the jury a document that set out the elements of the offence charged (MFI 3) and read that document to the jury. It explained the element of belief in the following terms:

2. [23]

   On 31 March 2022, day 26, prior to the commencement of closing addresses the learned trial judge returned to the written direction on the elements and read it aloud once more, including the above paragraphs concerning the element of belief. At the same time his Honour provided the jury with a written direction concerning the two available alternative verdicts (MFI 52). The following is an abbreviation of that document, extracted so far as relevant to the applicant’s argument on the conviction appeal (emphasis as in original):

3. [24]

   At the time of providing MFI 52, after reading pars 1 and 2 of the document his Honour said this to the jury:

4. [25]

   Part way through the Crown address, on 1 April 2022 (day 27), his Honour identified an inaccuracy in par 18 of the written direction on alternative verdicts. A revised version was supplied (MFI 60 in place of MFI 52). The correction has no bearing upon the issues in the appeal and no more need be said about it.

5. [26]

   On 5 April 2022 (day 29) at an early point in his summing up the learned trial judge distributed to the jurors an expanded written direction on the elements (MFI 70, in place of MFI 3). That document retained the paragraphs concerning the applicant’s belief about the money that had passed through his trust account – as quoted at [23] above. Those paragraphs were renumbered 11-13. An additional paragraph 14 was inserted, as follows:

6. [27]

   Having read the expanded elements direction to the jury, with additional explanation and instructions, his Honour drew their attention to the revised written direction on alternative verdicts, MFI 60, and read that out, also. His Honour then gave the following instructions orally:

7. [28]

   On Tuesday 6 April 2022 (day 30) the jury submitted the following question during the course of the summing up:

8. [29]

   His Honour responded as follows:

9. [30]

   Also on day 30, shortly before asking the jury to retire to consider their verdict, his Honour distributed to the jurors document entitled “Return of Verdict”, which spelt out the terms in which the foreperson should deliver the verdict in respect of the single count on the indictment or either of the alternatives, if applicable. The Return of Verdict document (MFI 73) was in the following terms (with emphasis and italics as in the original):

10. [31]

    That direction was read over to the jury. Shortly afterwards they commenced deliberations, which continued for the balance of 6 April 2022 and throughout the next day. The jury were unable to resume their deliberations on Friday, 8 April due to illness amongst them. Illness and the need for jurors to isolate in order to avoid the spread of infection continued during the following week. The trial was thereby extended to a point where one of the jurors had to be excused due to other commitments. Deliberations of the remaining 11 jurors resumed on Tuesday, 19 April 2022 and continued on 20 and 21 April 2022, until the verdict of guilty was returned at 2:32 pm on the latter date.

11. [32]

    Neither counsel sought any re-direction on any aspect of the learned trial judge’s instructions to the jury concerning the alternative verdicts and the circumstances in which a verdict of guilty of either of those alternatives could be returned. In particular, his Honour explicitly asked counsel whether the terms in which he had responded to the jury’s question on that topic were “satisfactory from the point of view of the parties”. Both counsel responded in the affirmative.

12. [33]

    There was a further exchange between the learned trial judge and counsel during the interruption to the jury’s deliberations. By email from his Honour’s Associate sent on Friday, 8 April 2022 the attention of counsel was drawn to s 5.4(4) of the Criminal Code, which is in the following terms:

13. [34]

    By the email, his Honour asked counsel to consider whether s 5.4(4) “might apply so as to modify the ‘no compromise’ direction given to the jury”. The email further explained the issue as follows:

14. [35]

    The Crown responded with a written submission citing Stanton v The Queen [2003] HCA 29 and King v The Queen (2012) 245 CLR 588; [2012] HCA 24 in support of the proposition that s 5.4(4) does not operate as postulated by his Honour because s 400.14 does not permit a jury that is unable to agree upon a verdict with respect to the offence as charged on the indictment “to move to consider the first alternative verdict”. Defence counsel informed his Honour, in writing, that he agreed with the Crown’s submissions. On 11 April 2022 the learned judge informed the parties that he accepted the submissions that had been made and that he would leave the directions to the jury as they stood. Reasons for that decision were subsequently published: R v Chalabian (No 13) [2022] NSWSC 470 at [58]-[86].

15. [36]

    For present purposes, the only significance of his Honour having invited the parties’ attention to s 5.4(4) is that it caused the Crown to provide submissions containing a detailed discussion of the principal authorities that are now relied upon by the applicant to challenge his Honour’s direction about consideration of alternative verdicts. Relevantly to the application of r 4.15 of the Supreme Court (Criminal Appeal) Rules 2021, it must be said that although there were placed squarely before defence counsel at trial the authorities now invoked to support of the point argued in the conviction appeal, he did not formulate any such point to the trial judge or ask for a re-direction.

Application for leave to appeal against conviction – ground 1

1. [37]

   Although ground 1 asserts an error in the learned judge’s directions “about the requirement for unanimity”, the applicant’s submissions advance a different complaint, namely, that his Honour erred in his directions to the jury:

2. [38]

   The applicant refers to his Honour’s use of the verb “consider” and cognate terms in the following parts of the written and oral directions (emphasis added to quoted passages):

   1. (1)

      Paragraphs 2 and 6 of the “Alternative Verdicts” document, stating that the jury “need only consider” an alternative verdict if not satisfied of the offence charged in the indictment.

   2. (2)

      The oral directions quoted at [25] above, that “the issue of alternative verdicts will only arise for consideration if each of you is not satisfied beyond reasonable doubt of the guilt of the accused for the offence charged” and “if you were not satisfied beyond reasonable doubt that the accused was guilty of the charge in the indictment, then you would consider the alternative verdicts”.

   3. (3)

      The oral directions quoted at [28] above, that “If you were not satisfied beyond reasonable doubt as to [the applicant’s belief that the money deposited to his trust account was proceeds of crime], you would consider whether you were satisfied beyond reasonable doubt of the elements of the first alternative verdict based on recklessness”.

   4. (4)

      His Honour’s affirmative answer, quoted at [30] above, to the jury’s question whether “we cannot consider an alternative verdict unless we all unanimously vote not guilty on the higher charge”.

3. [39]

   The applicant makes the following submissions:

4. [40]

   As in any summing up, his Honour’s directions were in some respects concerned with what each juror, individually, would have to decide and in other respects they were concerned with the collective act of the jurors contributing their respective votes, or conclusions, to the verdict of the whole. In a criminal trial by jury the individual decisions of each juror as to what evidence should be accepted, what facts should be found and whether the elements of the charge have been proved beyond reasonable doubt are expected to be made after discussion. Jurors’ individual reflection upon the evidence, their assessment of the issues and their exchanges of views with each other may take place in any manner and in any order of addressing the questions before them that they, severally, may choose. In Stanton v The Queen Gleeson CJ, McHugh and Hayne JJ said that the trial judge in that case, Anderson J, would have “impermissibly restricted [the jury] in the manner in which they might properly exercise their function” if he had purported to dictate “a sequence of deliberation”: at [34]. Their Honours said at [35]:

5. [41]

   In Stanton v The Queen the appellant had discharged a shot gun at his wife at close range and killed her. He was charged with wilful murder contrary to s 278 of the Criminal Code (WA), on the basis that he had intended to kill the victim. If the jury were not satisfied of that intent but only that he intended to cause grievous bodily harm, he would be guilty of the statutory alternative of murder, contrary to s 279. If the jury were not satisfied that the appellant had either of those intentions but that he had had only menaced his wife with the weapon and had not intended to shoot, then a verdict of guilty of manslaughter, contrary to s 280, could be returned. In practical terms, having regard to the circumstances, the real alternatives (apart from acquittal) were guilty of wilful murder or guilty of manslaughter.

6. [42]

   The grounds of appeal in Stanton v The Queen asserted that the jury had erroneously been directed to consider the possible verdicts in a particular order, whereas they should have been told that they could consider the charge of wilful murder and the alternatives in any order. It was contended that the directions taken as a whole had the effect of precluding individual jurors from considering manslaughter at all so long as any one of them found the accused guilty of wilful murder. The first passage in the summing up that was impugned on that basis included the following:

7. [43]

   The second impugned passage was the response of the trial judge to the following question from the jury:

8. [44]

   Gleeson CJ, McHugh and Hayne JJ held as follows:

9. [45]

   As to the second of the matters identified by their Honours at [36], it was noted at [38] that elsewhere in the summing up the trial judge had suggested to the jury what they might find to be a convenient sequence to their deliberations, thereby negating that he purported to direct them in that respect. As to the third of the matters, their Honours said this at [39]:

10. [46]

    The circumstances relevant to ground 1 in the present leave application are closely parallel to the circumstances in Stanton v The Queen. In this case, also, there was a single issue, namely, the applicant’s state of mind with respect to the character of the $24.2 million that was deposited to his firm’s trust bank account in 53 separate amounts and that was subsequently transferred out of the account. Did he believe that the money was proceeds of crime, or was he reckless, or negligent, as to whether it bore that character? Adapting the words of the majority in Stanton v The Queen at [38], it is difficult to understand how any possibility of sequential reasoning on that issue could have arisen. In whatever order the jury examined the evidence, and considered the primary facts, when they came to decide whether the case was one of belief, recklessness, negligence, or none of those alternatives, the jury would necessarily be determining a single issue of state of mind, on which the outcome depended.

11. [47]

    Another parallel is the tenor of the jury question in the present case. It was concerned with the alternative contingencies (a) if all jurors “vote not guilty on the higher charge” or (b) “if we are divided on the indictment”. This clearly concerned the position after individual and collective deliberation had taken place, at a point when votes would be counted in the formal process of adopting a verdict. The learned judge’s answer would necessarily be understood as addressing that stage, not as a direction about the sequence in which the jurors should reason and discuss.

12. [48]

    In my view it is clear that on every occasion when the learned trial judge told the jury that they would consider alternative verdicts only if not satisfied that the Crown had proved the offence charged, he was directing them with respect to the performance of their collective duty of casting their votes, or in other words, contributing their conclusions towards formally resolving upon the verdict to be returned. The words “consider” and “consideration” were explicitly used in conjunction with “verdict” and “alternative verdicts” and associated words or phrases. The sense of what his Honour said in the passages complained of is that the jury were merely told, correctly, that they need not consider how their voting stood with respect to the possible alternative verdicts unless and until they were unanimous that the applicant was not guilty of the charge on the indictment.

13. [49]

    Nothing said in the passages complained of, or elsewhere in the summing up, conveyed that the jurors should not reflect upon, or discuss, or otherwise deliberate about whether the applicant was no more than reckless or negligent until after they had reached unanimity upon whether he believed that the money was proceeds of crime so as to be guilty as charged. On a fair reading of the summing up as a whole it does not convey any such direction about the sequence of deliberation. Further, a direction of that nature would be impossible to formulate in meaningful terms: deliberation about whether the applicant had the belief necessary to sustain the offence charged could not realistically be undertaken without concurrent deliberation on the integrally involved question of whether his state of mind may have been something less than belief, such as recklessness or negligence. Any attempt by the trial judge to propound and direct a sequence of deliberation on the single issue in the case would have been very odd and conspicuous. Counsel who appeared for the applicant at trial (who did not appear on the appeal) clearly did not perceive that his Honour conveyed such a direction, which tends to confirm the fair reading of the summing up in print.

14. [50]

    Leave to appeal against conviction upon the ground argued should be refused. The ground has no merit. No miscarriage of justice arose from the aspects of the summing up that are criticised in the applicant’s submissions on this ground.

Application for leave to appeal against sentence – ground 3

1. [51]

   Consideration of the applicant’s proposed ground of appeal against sentence, involving a question of parity with the sentences imposed on three other offenders, requires a summary of the offences for which the others received their sentences and some untangling of the different circumstances relevant to punishment of each of them, including discounts that were applied for pleas of guilty and for assistance to the authorities.

2. [52]

   Rostankovski pleaded guilty to three charges as follows:

   1. (1)

      Aiding and abetting the commission by Adam Cranston of an offence against s 135.1(3) of the Criminal Code (engaging in conduct with the intention of dishonestly causing loss to the Commonwealth). Adam Cranston’s principal offence was the Plutus tax fraud described in the applicant’s statement of agreed facts reproduced at [8] above.

   2. (2)

      Blackmail, contrary to s 249K(2) of the Crimes Act 1900 (NSW), committed jointly with Hausman and constituted by making unwarranted demands with menaces, with intent to obtain a gain by threatening to publish accusations that three of the Plutus conspirators had committed serious indictable offences, namely, fraud and money laundering.

   3. (3)

      Jointly with Hausman and the applicant, dealing with money that was and that he believed to be proceeds of crime to a value of $1 million or more, contrary to s 400.3(1) of the Criminal Code. The particulars of the offence consisted of Rostankovski’s part in causing the $24.2 million proceeds from the blackmail of the Plutus conspirators to be passed through the applicant’s trust bank account.

3. [53]

   The sentencing judge in the District Court concluded that it was open to him to fix an aggregate sentence for the two Commonwealth matters, counts (1) and (3). After applying a 20% discount for Rostankovski’s pleas of guilty, the judge proposed indicative sentences of 1 year and 7 months for the offence of aiding and abetting a fraud and 9 years and 6 months for the money-laundering, underlying a proposed aggregate of 10 years. His Honour proposed a sentence of 4 years and 9 months with a non-parole period of 2 years and 5 months on count (2), the blackmail offence.

4. [54]

   The sentencing judge then shortened the proposed aggregate for the Commonwealth matters from 10 years to 8 years (with a non-parole period of 4 years and 9 months) and he shortened the proposed sentence for the blackmail from 4 years and 9 months to 4 years (with a non-parole period of 2 years and 5 months). His Honour ordered that the reduced aggregate for the Commonwealth matters should commence at the expiration of the non-parole period for the blackmail. The reason for the shortening was to give effect to the principle of totality. Although not expressly stated in the remarks on sentence, it was open to infer from the approach taken that his Honour had proceeded from a mistaken understanding that the Commonwealth sentence could not commence any earlier than the expiration of the non-parole period for the State offence and that reducing each sentence was the only way to achieve an appropriate overall penalty. Rostankovski’s effective total head sentence was thus 10 years and 5 months with an effective total non-parole period of 7 years and 2 months.

5. [55]

   The Crown appealed to this Court and argued, inter alia, that the learned judge had erred in giving effect to the principle of totality by reducing each sentence rather than by maintaining the length of each term and structuring commencement dates to achieve greater concurrence. It was submitted that this method had resulted in reduction of both the Commonwealth aggregate sentence and the sentence for the blackmail to the point of manifest inadequacy. This Court concluded that the sentencing judge’s method was open to him: R v Hausman; Hausman v R; R v Rostankovski; Rostankovski v R [2022] NSWCCA 24 at [104] and [124] (Fullerton J); [211]-[212] (Adamson J); [220] (Hamill J). The sentences were not disturbed.

6. [56]

   Hausman pleaded guilty to the following two charges:

   1. (1)

      Jointly with Rostankovski and the applicant, dealing with money that was and that he believed to be proceeds of crime to a value of $1 million or more, contrary to s 400.3(1) of the Criminal Code. This charge concerned Hausman’s part in passing the $24.2 million proceeds from the blackmail of the Plutus conspirators through the applicant’s trust bank account.

   2. (2)

      Blackmail, contrary to s 249K(2) of the Crimes Act, committed jointly with Rostankovski and constituted by Hausman’s role in demanding with menaces the payment of $25 million by the Plutus conspirators.

7. [57]

   Hausman was sentenced by the same judge as Rostankovski. His Honour adopted a starting point of 15 years for count (1), the money-laundering offence, and 10 years for count (2), the blackmail offence. A 50% discount was applied for early pleas of guilty and assistance to the authorities. That reduced the sentences to 7 years and 6 six months and 5 years, respectively. The sentencing judge then decided that, to give effect to the principle of totality, “the notional total effective head sentence would be 10 years imprisonment”. His Honour considered that that was to be achieved by fixing a 5 year sentence for the blackmail (with a non-parole period of 3 years) to commence first and reducing the sentence for the money laundering from 7 years and 6 months to 5 years (also with a non-parole period of 3 years), to commence from the expiry of the non-parole period of the sentence for the blackmail. The result was an effective total head sentence of 8 years with an effective total non-parole period of 6 years.

8. [58]

   The Crown also appealed this outcome and made the same contention about the sentencing judge’s method with respect to totality as it made in relation to Rostankovski’s sentence. In this Court it was observed that the sentencing judge’s statement that he sought to achieve a “notional total effective head sentence [of] 10 years imprisonment” was obscure. The actual effective overall sentence was not 10 years. The Crown’s argument was rejected in relation to Hausman as it had been in relation to Rostankovski and for the same reasons, at the references cited above. Hausman’s sentence was not disturbed.

9. [59]

   Dev Menon was found guilty, at the conclusion of his trial by jury, of the following offences:

   1. (1)

      Conspiring with Adam Cranston and others with the intention of dishonestly causing a loss to the Commonwealth, contrary to s 135.4(3) of the Criminal Code.

   2. (2)

      Conspiring with Adam Cranston and others to deal with money that was proceeds of crime and that the offender believed to be such proceeds, to a value of $1 million or more, contrary to ss 11.5(1) and 400.3(1) of the Criminal Code.

10. [60]

    The outline of the conspiracy to cause loss to the Commonwealth, count (1), appears from the agreed statement of facts that was tendered at the applicant’s trial, reproduced earlier in these reasons. The scheme was planned and its implementation commenced in the early months of 2014. Menon was not involved initially but from March 2015 was engaged in “back-office” accounting and legal work in the operation of the scheme. From June 2015 until his arrest in May 2017 he was a knowing participant in the conspiracy. He provided legal and accounting advice and services to the principal conspirators. He helped to manage the straw directors of the second-tier companies. From May 2016, with Jason Onley and Adam Cranston, Menon conducted the day-to-day operations of the second-tier companies. He played a prominent role in attempting to deflect ATO investigation and discovery of the fraudulent scheme.

11. [61]

    Menon’s participation in the conspiracy to deal with the proceeds of crime spanned the same period of nearly two years. His activities included facilitating transfers of the unremitted PAYG withholding amounts for the benefit of Jason Onley and Adam Cranston, using the trust account of Clamenz Lawyers, the law firm of which he was a member. Menon set up a company through which some of the proceeds were distributed. One aspect of his participation in this conspiracy was his involvement in creating the deed under which $24.2 million was transferred to the applicant’s firm’s trust account. He drafted and settled the deed with a view to disguising the true nature of the blackmail payments.

12. [62]

    The learned trial judge, Payne JA, sentenced Menon to a term of 8 years and 6 months for the conspiracy to cause loss to the Commonwealth and 12 years for the money-laundering conspiracy: R v Dev Menon [2023] NSWSC 768. His Honour ordered that the latter sentence commence two years after the commencement of the sentence for the conspiracy to cause loss. The result was total overall term of 14 years with a single non-parole period of 9 years. In arriving at that decision his Honour took into account the sentence that Johnson J had passed on the applicant. Johnson J, in turn, had taken into account the sentences passed on Rostankovski and Hausman in the District Court.

13. [63]

    The applicant submits, and I accept, that “all three offenders [the applicant, Rostankovski and Hausman] had strong subjective cases”. In support of the applicant’s grievance arising from comparison of his sentence with the sentences of Rostankovski, Hausman and Menon, the applicant does not rely upon material differences in their respective subjective circumstances. Although not acknowledged in the applicant’s written submissions, Menon’s subjective case was markedly more compelling than the applicant’s. His daughter suffered from a serious medical condition that made her highly dependent upon her parents. The incarceration of Menon would have a significant detrimental impact upon her well-being and would cast a very great burden on the child’s mother to care for her, in effect as a single parent. Payne JA gave weight to those circumstances in mitigation of sentence.

14. [64]

    The applicant’s ground 3 is a claim of a lack of parity between, on the one hand, sentences imposed on co-offenders who were dealt with for multiple offences and received the benefit of the totality principle and, on the other hand, the sentence imposed on himself for a single offence, in common with the others, not attracting the operation of the totality principle. The Court must consider all components of the sentences that each offender is serving for each offence and must have regard to the circumstances of both the common and the unrelated offending of the co-offenders: Kelly v R [2017] NSWCCA 256 at [26] and [39] (Beech-Jones J, other members of the Court agreeing). Beech-Jones J said this:

15. [65]

    Kelly v R was applied – and was considered together with other authorities on the subject of parity in a case such as the present – by Dhanji J (Macfarlan JA and Adamson J agreeing) in Wood v R [2022] NSWCCA 84 at [44]-[56].

16. [66]

    In comparing the applicant’s sentence of 12 years for breach of s 400.3(1) with Rostankovski’s aggregate sentence of 8 years for both the s 400.3(1) offence and his aiding and abetting of Adam Cranston’s fraud on the Commonwealth, it is necessary to take into account how that aggregate was derived. The indicative sentence for the proceeds of crime offence, 9 years and 6 months after application of a 20% discount, implies a starting point 11 years and 10 months. The applicant could not reasonably complain about having received a head sentence 2 months longer than that starting point, for the offence that was common to both of them.

17. [67]

    The applicant’s objective criminality in dealing with the proceeds of crime was significantly greater than that of Rostankovski. He used his position as a solicitor to negotiate the deed under which the nature of the funds would be disguised. He thereby applied professional skill that was indispensable to the enterprise and that Rostankovski certainly did not have. He used his law firm’s trust bank account as a cloak of legitimacy under which the funds could shed their status as blackmail payments and assume the guise of lawful dealing. Again, this was an indispensable contribution, at the core of the commission of the offence. As Johnson J observed in his remarks on sentence at [137]-[139], the applicant’s role was greater than that of Rostankovski albeit less than the role of Hausman, who was the architect of the money laundering project. The benefits obtained by the applicant were very much less than those obtained by Rostankovski and Hausman but nevertheless substantial.

18. [68]

    Having regard to the indicative sentences that underlie Rostankovski’s aggregate sentence of 8 years for his two Commonwealth offences, the great majority of that aggregate must be attributable to the s 400.3(2) money laundering offence. However, the gaol time solely attributable to that offence remains undifferentiated and incalculable. In considering parity with the applicant’s head sentence of 12 years and non-parole period of 7 years and 6 months, the Court is not bound, or able, to make a direct arithmetic comparison with the amount of gaol time to be served by Rostankovski solely referable to the common offence.

19. [69]

    Comparing the applicant’s sentence for that common offence with Rostankovski’s aggregate sentence for two Commonwealth matters does not reveal unjust disparity when one considers the steps by which Rostankovski’s comparable indicative starting point of 11 years and 10 months was reduced and incorporated into the aggregate. The initial discounting of 20% arose from Rostankovski’s plea of guilty, which differentiated him from the applicant. The shortening of the aggregate from 10 years to 8 arose from the sentencing judge’s unorthodox method of giving effect to the totality principle. Both of these are points of incomparability between the two offenders’ sentencing processes. The application for leave fails to recognise that the widely different sentencing circumstances justifiably produced different outcomes between the applicant and his co-offender.

20. [70]

    Similar considerations apply to the comparison between the applicant’s sentence and Hausman’s. The starting point for Hausman’s sentence for the s 400.3(1) offence was 15 years. Johnson J found that he had initiated the money laundering scheme and had procured the applicant’s advice and assistance in relation to it. His Honour assessed the applicant’s role as significantly less objectively serious than that of Hausman, even taking into account the offender’s contributions of essential professional skill and access to his trust account. The applicant has no legitimate grievance from comparison of his sentence with the starting point of 15 years for Hausman.

21. [71]

    There were two stages of reduction that resulted in Hausman serving 5 years with a non-parole period of 3 years for the offence that was common to them both. First there was the 50% reduction for plea and assistance. Secondly there was the shortening of the resultant head sentence by a further 2 years and 6 months to achieve, by his Honour’s unusual method, an appropriate overall effective sentence when the sentence for money laundering was accumulated on the non-parole period for the blackmail offence. Neither of the circumstances that gave rise to the two-step reduction was present in relation to the applicant. Therefore, direct comparison cannot demonstrate disparity and no justifiable sense of grievance can arise from considering Hausman’s sentence for their common offence.

22. [72]

    Menon’s involvement in dealing with the $24.2 million proceeds of crime was quite different from and less significant than the applicant’s involvement. Menon drafted the deed and negotiated its terms with the applicant. He subsequently caused the several instalments of the blackmail money to be deposited to the trust account. Only the applicant used that account to cause the laundered funds to be passed out into the hands of Rostankovski and Hausman. Menon’s involvement in the scheme was also significantly less than that of Hausman.

23. [73]

    Menon’s participation in the money laundering conspiracy with the other Plutus offenders, for which he was given a head sentence of 12 years, was of much wider scope and of longer duration than just the dealing with the $24.2 million in blackmail payments. The wider particulars are summarised at [62] above. However, his sentence for that offence was moderated by the circumstance that he was dealt with at the same time for the conspiracy to cause loss to the Commonwealth, which was committed over the same period of nearly two years and the overt acts of which substantially overlapped Menon’s money laundering activity. In that situation and making allowance for the additional mitigating factors in Menon’s subjective case, there is no disparity between the applicant’s sentence and Menon sentence for their respective offences against s 400.3(1) of the Criminal Code.

Proposed orders

1. [74]

   I propose the following orders:

   1. (1)

      Refuse leave to appeal against conviction on ground 1.

   2. (2)

      Grant leave to appeal against sentence on ground 3.

   3. (3)

      Dismiss the appeal against sentence.