R v Brown[2001] QCA 553

DAVIES JA:  The applicant pleaded guilty in the District Court at Townsville on 12 October this year on two counts.  The first was that she defrauded the Commonwealth between 1 July 1992 and 28 September 1998.  The second was that she defrauded the Commonwealth between 1 July 1995 and 29 September 1997. 

The same sentence was imposed on each count.  It was one of three years imprisonment to be released after serving six months upon giving security by recognisance in the sum of $1,000 on the condition that she be of good behaviour for four years and that she comply for two years following her release from prison with a number of conditions.  The applicant seeks leave to appeal against that sentence. 

Both offences arose out of the operations of a company business in which the applicant and her husband were the shareholders and had the effective control.  The first count involved a deliberate and calculated course of conduct by the applicant over a period of about six years by which she deducted group tax from the salaries of employees of the company, certified that those amounts had been remitted to the Australian Taxation Office, but failed to remit them.  The amounts so deducted but not remitted totalled over $107,000. 

Count 2 involved similar conduct but in respect of her own income.  The total of the amounts which she thereby failed to remit was a little over $5,000. 

The conduct was, as I have said, deliberate and calculated.  It involved producing numerous false documents on a regular basis over a period of more than six years.  Moreover, it ceased only as a result of an audit by the Australian Taxation Office.

It is said by Mr Davis on the applicant's behalf that there was no attempt to cover up the fraudulent activity.  Consequently, he said, the learned sentencing judge was wrong in saying that this was an offence of a kind which it is difficult to detect. 

It is true that it was discoverable from the books of accounts for the company or, if the Taxation Office had done so, by matching the statements given to employees by the company with amounts remitted by group tax.  However, as is well known, that is not done in every case all the time, no doubt because that would be a very expensive exercise.  Offences of this kind tend to be discovered only on random audits of the kind which were done here.

Consequently, in my opinion, it is correct to say, as the learned sentencing judge said, that offences of this kind are difficult to detect.  The mere fact that if an investigation had been done at any time the applicant's fraud would have been revealed does not, in my opinion, affect the correctness of that statement.  Accepting the present system adopted by the Australian Taxation Office and the knowledge which people involved in business have of how that system operates, offences of this kind are not readily detectable and that is widely known in the business community.  Hence the need, in cases of this kind, for sentences which provide a general deterrent.

The applicant also takes issue with the following sentencing remarks by his Honour:

 "It is also the case that during that interview [with the Federal police] you admitted that the company, in fact, had sufficient funds during the period involved to meet its group tax liabilities.  In other words, it had sufficient funds to pay the money as time went on; as the money was deducted." 

The applicant submits that this was incorrect; on the contrary that it was constantly the applicant's position that the failure to remit tax was, at least in part, caused by the company's financial position.  For this the applicant relies on a psychiatric report by Dr Michael Likely dated 24 July 2001 in which that doctor related that the applicant had attributed her failure to remit tax to a need to constantly juggle limited resources in the business.

However, when asked in an interview with Federal police whether she had moneys in the bank to cover the monthly payments of group tax over the years the applicant answered, "I would have over the years".  Earlier in the interview when asked whether she had any intention of remitting money when she was deducting it from wages the applicant replied, "I did, yes, but I never seemed to have the money there". 

The inference I would draw from these statements is that, whilst the company did not, or did not always have the funds ready to pay the amount deducted at the time it was deducted, it did have sufficient money to do so at various times over the years during which the frauds were committed.

In stating in her statement of facts tendered before the learned sentencing judge the aggravating factors of this case, the respondent included the following:

"7.The accused made no attempt to remit the moneys or to come into any arrangement with the ATO to pay off the moneys until after the business was audited.  This does not appear to be a case of the business needing the non-remitted group tax in order to survive or a case of extensive business difficulties.

8.The defendant admitted that the business had enough money to pay the group tax and enjoyed the benefit of those moneys."

When asked whether he challenged those statements, counsel for the applicant before his Honour declined to do so and made no submissions that the fraud was caused by financial problems. 

I do not think it is open to the applicant now to contradict this on the basis of a statement made by her psychiatrist which was not relied on before the learned sentencing judge, notwithstanding that the report which contains that statement was before the Court.

There are, it must be said, a number of mitigating factors.  All except about $15,000 of the amount outstanding has been repaid, and repayments commenced during the initial investigation.

The applicant took part in a lengthy interview with the Australian Federal Police, made full admissions to them, and thereafter cooperated in the investigation.  She pleaded guilty at the earliest opportunity.  She has reached 54 years of age with no prior convictions, and she has had some psychiatric problems, no doubt at least exacerbated by her own dishonesty.

The principles relevant to sentencing in cases of this kind are settled and it is not necessary to repeat them here.  A number of comparable cases were cited to this Court.  Those cited by the applicant were Wright CA No 432 of 1993, 2 March 1994, Mackay CA No 12 of 1996, 13 March 1996, Tacey CA No 434 of 1993, 2 March 1994 and To and Do [1999] 2 QdR 166.

The respondent referred also to Mai CA No 257 of 1995, 25 August 1995, and another case of Wright CA No 149 of 1993, 16 June 1995.  All of these cases involved appeals by the Commonwealth Director of Public Prosecutions with the necessary consequence of cutting across the time-honoured concept of criminal administration by putting in jeopardy for the second time the freedom beyond which the sentence is imposed and the effect which that has on an appellate Court in imposing a more onerous sentence.

It is unnecessary to discuss any of those cases at length.  However it must be borne in mind that because they were appeals by the Commonwealth Director of Public Prosecutions, the sentences imposed by this Court in those cases were conservative.  There is, in my opinion, nothing in the comparable cases, that is, the cases to which I have referred, and in addition the sentences imposed in the District Court contained in a schedule which was put before the learned sentencing Judge, which would lead me to think that the sentence imposed here was manifestly excessive. 

I would therefore refuse the application.

ATKINSON J:  While in my view the mitigating factors in this case, including those mentioned by Justice Davies, and in particular the difficult family situation referred to by her husband and put before the sentencing Judge, would have warranted a shorter actual period to be spent in custody, I agree that the sentence imposed is not outside the available range and therefore would refuse the appeal.

MULLINS J:  I agree with the reasons of Justice Davies and the order proposed.

DAVIES JA:  The application is refused.