SUPREME COURT OF QUEENSLAND 

1. McMURDO P: Each application for leave to appeal against sentence should be refused.  I agree with the reasons of Fraser JA but wish to make some brief additional observations. 

2. Sentences imposed in other jurisdictions for Commonwealth offences are often of limited assistance as comparable cases. The sentences may be structured to accord with state or territory practices and procedures which have no application in Queensland.  By way of example, s 19AA Crimes Act 1914 (Cth) requires state or territory laws applying to the remission or reduction of sentences to apply to federal sentences.  Similarly, s 19AZD requires that state or territory laws providing for offenders' leaves of absence, pre-releases and the like also apply to federal offenders.  The applicants have relied on the Western Australian case of La Rosa v The Queen^[1] in attempting to demonstrate the excessiveness of their sentences.  Had La Rosa been sentenced in Queensland, he could ordinarily have expected a sentence with a non-parole period of less than 50 per cent of his head sentence to reflect his co-operation with authorities and especially his preparedness to give evidence against others.  The structure of the sentence imposed on La Rosa may well have been affected by Western Australian sentencing practice and procedure.  As Fraser JA explains, it does not demonstrate that the sentences imposed on the applicants were outside the appropriate range.

3. I agree with Fraser JA that the weight given by the sentencing judge to the fact that Mr Phillips was detained in custody for 71 days in harsh conditions in Brazil was adequate in the circumstances.  This period of pre-sentence custody was declared as time served under the sentence and the time Mr Phillips was required to serve in actual custody was further reduced from six months to five months to reflect this.  Mr Phillips' case was not apposite to R v Allingham, Landsdowne, Marshall and Booth^[2] where Cullinane J noted:

"Booth spent some time in the Brisbane watchhouse.  The circumstances of this custody were the subject of a good deal of discussion at the time of sentence and it appears that His Honour treated the 18 days he had spent there as the equivalent of 18 weeks.  This accords with the approach taken in some earlier matter or matters."^[3]

This generous treatment of Booth's pre-sentence custody was apparently to make the public aware of judicial concern about an established serious shortcoming then existing in the Queensland criminal justice system, namely the holding of prisoners for extended periods in the then notorious, over-crowded and unsatisfactory conditions in the Brisbane watchhouse, so that it might be speedily remedied by the executive.  By contrast, the sentencing judge in Mr Phillips' case had only the uncontested submissions of Mr Phillips' counsel as to the conditions in the Brazilian prison, a matter well outside his Honour's jurisdiction and influence in any case. 

4. Section 16A Crimes Act does not specifically refer to general deterrence as a matter to be taken into account in sentencing a Commonwealth offender.  Section 16A(1) recognises, however, that a court must impose a sentence that is of a severity appropriate in all the circumstances of the offence.  Section 16A(2) sets out matters that the court must take into account in sentencing, but its opening words state that these matters are "[i]n addition to any other matters".  The clear inference from these terms of s 16A is that general deterrence may be relevant when sentencing federal offenders.  Chapter 5C Corporations Act 2001 (Cth), which deals with managed investment schemes, and its requirement under s 601ED(5) that a person must not operate a managed investment scheme required to be registered under s 601EB, is plainly aimed at consumer protection.  General deterrence is a relevant factor in sentencing for more serious examples of offences against s 601ED(5) like the present offences.

5. The sentences imposed on each applicant were, in the circumstances, by no means manifestly excessive

6. FRASER JA: Each of the applicants, Mr Phillips and Mr Woolgrove, was convicted on his plea of guilty of an offence against s 601ED(5) of the Corporations Act 2001 (Cth), that each operated a managed investment scheme, the Hatcher Unit Trust, which scheme had more than 20 members, and was required to be registered under s 601EB of the Corporations Act 2001 (Cth) but was not so registered.  They were sentenced on 13 June 2008.

7. Mr Woolgrove was sentenced to two years imprisonment, and it was directed that he be released after serving six months upon giving security by recognizance in the sum of $2,000 conditioned that he be of good behaviour for a period of two years.

8. Mr Phillips was sentenced to two years imprisonment, and it was directed that he be released after serving five months upon giving security by recognizance in the sum of $2,000 conditioned that he be of good behaviour for a period of two years. The sentencing judge stated that Mr Phillips had been held in pre-sentence custody in relation to the proceedings for that offence and for no other reason on and from 29 November 2005 to and including 8 February 2006, namely, 71 days.  It was declared that the whole of the period of 71 days was imprisonment already served under the sentence.

9. Each of the applicants applies for leave to appeal against sentence on the ground that the sentences imposed was "manifestly excessive in all circumstances".

Circumstances of the offences

10. Managed investment schemes are regulated by Part 5C of the Corporations Act 2001 (Cth) which, includes a number of provisions designed to protect the public.  A managed investment scheme must be registered with the Australian Securities and Investments Commission (Part 5C.1); the responsible entity of a registered scheme must be a public company and it must hold a financial services licence (Part 5C.2); the scheme must have a constitution which must include a compliance plan (Parts 5C.3 and 5C.4); the scheme must have a compliance committee (Part 5C.5); a registered company auditor must be engaged to audit compliance with the compliance plan and must conduct an audit of it within three months of the end of each financial year (s 601HG); and the auditor is obliged to notify the Australian Securities and Investments Commission if the auditor has reasonable grounds to suspect a contravention of the Act that could not otherwise be dealt with by comments in the report.

11. In order for the responsible entity to obtain the necessary financial services licence, it must satisfy the requirements specified in s 782 of the Act (s 601FA). The Australian Securities and Investments Commission generally imposes many conditions upon such licences, including conditions requiring the responsible entity to maintain professional indemnity insurance and insurance against fraud.

12. The purpose of this regulation, like the similar regulation which preceded it in the Corporations Law, is to protect the investing public by requiring those who raise money from the public to structure the offer in such a way that investors are adequately informed as to the nature of the risk they are to acquire so they can make a judgment as to the risk: "The most basic policy justification for securities legislation may be the desirability of a minimum standard of ‘fairness’ in the securities market, and the benefits of such legislation in the protection of individual investors".^[4]

13. The circumstances in which each applicant operated an unregistered management investment scheme contrary to s 601ED(5) of the Corporations Act 2001 (Cth) were set out in an agreed statement of facts.  The following facts, derived from that agreed statement of facts, were stated by the sentencing judge:

"In September 2001, Mr Phillips instructed a solicitor in New Zealand to prepare agreements between the entities, United Sub Seas Services International Ltd ('USSSIL') Michael Hatcher, United Sub Seas Services, and the Hatcher Unit Trust. 

Those agreements related to the funding of and consequent interest obtained in the salvage of the shipwrecks, the 'Cornelia' and the 'Travers'.  Subsequently, further agreements were entered into in relation to other shipwrecks.

The core agreements were established by the following documents: a marine salvage agreement dated 13 September 2001 relating to the 'Cornelia' and the 'Travers' by which USSSIL was to pay up to US $2 million for 70 per cent of the proceeds, an assignment of marine salvage rights dated 4 October 2001 by USSSIL to the Hatcher Unit Trust in respect of 10 per cent of the proceeds for US $2 million and a trust deed dated 14 October 2001 establishing the Hatcher Unit Trust.

Monies were to be raised from investors through the sale of units in the Hatcher Unit Trust.  The intentions expressly stated in the deed establishing the Hatcher Unit Trust included that:

(a)subscriptions would be sought from private investors, and

(b)the subscriptions would be applied in acquiring certain marine salvage rights.

The marine salvage rights were the subject of agreement between USSSIL, Mr Hatcher, and United Sub Seas Services, and the Hatcher Unit Trust as prepared by the New Zealand firm of solicitors on the instructions of Mr Phillips.

The intention of the structure to provide for a split of the proceeds as to 10 per cent to the salvor and 90 per cent to USSSIL was discussed between Mr Phillips and the New Zealand solicitor when the agreements were put in place and implemented on Mr Phillips' instructions.

The evidence of the New Zealand witnesses who dealt with the day to day administration of the scheme is that they took their instructions from both applicants particularly as to the appropriation and disbursement of subscriptions.

In order to attract investments, an information memorandum for the Hatcher Unit Trust was produced. There were two versions of the information memorandum dated October 2001 and June 2002 respectively. It was those information memoranda that were in circulation to potential Australian investors. The information memoranda set out that USSSIL owned a 70 per cent share in the salvage of the shipwrecks 'Flor De La Mar', 'Travers' and the 'Cornelia' and that the Hatcher Unit Trust had been assigned up to 10 per cent of USSSIL's rights.

The investors were invited to purchase units in the Hatcher Unit Trust and thereby acquire a proportionate right to share in the proceeds of any salvage retrieved. The document stated that all funds received from investors would be applied to USSSIL and also that the purchase price payable for up to 10 per cent of the marine salvage rights was US $2 million, which was also stated to be 10 percent of the value that USSSIL had put on its interest in the marine salvage rights.

However, the information memoranda did not disclose the contents and workings of all of the agreements relevant to the operation of the scheme. The information memoranda predicted substantial gains for investors. The information document stated, 'On the basis of the Trust's research of the targeted shipwrecks and their manifests, the Trust conservatively forecasts return to investors of approximately 1,365 per cent in the event all 3 of the targeted vessels are recovered, and a return of 875 per cent if only the 'Flor De La Mar' is recovered.'

The highlights section of the information memoranda stated as follows:

• 'It is estimated that 75% of all the  gold found by man over the last 6,000 years is lying at the bottom of the ocean.
• It has been calculated that if all lost treasure and items of value could be recovered from the ocean, and this wealth could be evenly distributed, every man, woman and child on earth could live very comfortably for the rest of their lives.'

Mr Phillips was the director of USSSIL and the majority shareholder. However, there is evidence that he held those shares as trustee for Mr Woolgrove, and another man, John Carson. USSSIL had a contractual obligation to provide up to US $2 million to fund the salvage operation on the condition that proof of expenditure was first provided by the salvors. Over the period involved, about 90 per cent of the raised funds was distributed not to the salvors but to Mr Phillips and Mr Woolgrove as well as Mr Carson, or at least to bank accounts controlled by each of them.

The available records indicate disbursement of significant amounts of money to both applicants and Mr Carson or to their respective benefit.

The scheme was intended to be offered to potential investors in Australia and elsewhere. Between 29 January 2002 and 13 May 2003, 130 Australians invested a total amount of US $590,490 in the Hatcher Unit Trust.

Mr Phillips, was expressly identified in the information memoranda as connected to USSSIL and he had direct contact with many of the Australian investors in relation to inquiries concerning the scheme.

Mr Woolgrove, during the relevant period, was resident in Australia and subject to an ASIC banning order. There is evidence that he dealt directly with two investors. There were also telephone calls between him and Mr Scott Souter who acted on his behalf in promoting or selling the scheme.

Furthermore Mr Woolgrove, was directly involved in the promotion of the Hatcher Unit Trust through a stall at a diving expo held in Brisbane on the 14th to 15th September 2002.

Mr Phillips, made the initial contact and arrangements for the stall with the expo organiser.

This scheme was not capable of registration primarily because it was not operated by a responsible entity which was a public company holding an Australian financial services licence and there was no compliance plan as required by section 601HA of the Corporations Act 2001.

Further, the information memoranda could not have satisfied the requirements of a product disclosure statement for reasons that included:

(a)there is no disclosure as to a responsible entity and compliance arrangements;

(b)there is not disclosure as to all of the contents and workings of all of the agreements relevant  to the operation of the scheme;

(c)financial accounts and forecasts for the Trust that would meet Australian accounting standards were not disclosed;

(d)there is inadequate disclosure of the risks associated with the investment;

(e)it contains at least controversial, if not potentially misleading information, for example:

(i)the information about Mr Phillips does not disclose his previous convictions and there is no reference at all made to Mr Woolgrove's involvement, particularly having regard to his criminal history and the banning order;

(ii)the claim that 75% of all gold found by man over the past 6000 years is lying at the bottom of the ocean' is without apparent basis;

(iii)the claim that 'it has been calculated that if all the lost treasure and items of value could be recovered from the ocean and its wealth be evenly distributed, every man, woman and child on earth could live comfortably for the rest of their lives' is, again, without apparent basis; and

(iv)the examples of previous returns to investors and anticipated financial returns are without apparent basis."

14. The agreed statement of facts included the following conclusions:

"46.Each of Phillips and Woolgrove were involved directly in the operation of an unregistered Management Investment Scheme in Australia, as part of their involvement in the wider operation of that scheme.  Further, each of them:

(a)was equally and instrumentally involved, from at least the point when it was made available to Australian investors and/or required registration in Australia;

(b)directly and significantly benefited from the proceeds of the scheme;

(c)was aware that the scheme was not one that could have been so operated in accordance with Australian law."

Mr Woolgrove's personal circumstances

15. Mr Woolgrove was aged 38 to 39 years at the time of commission of the offence and 44 years at the time of sentence on 13 June 2008. He was arrested on 18 March 2004 and granted bail immediately. He had a criminal history which included larceny in 1982 and 1984, selling goods subject to a consumer lease or mortgage in 1986, and building breaking and felony in 1988.

16. On 10 September 1998 he was convicted of 14 counts of an offence involving the issue of an invitation to buy a prescribed interest without an approved deed, contrary to s 1065 of the Corporations Law.  He was sentenced to four months imprisonment to be released forthwith on a $200 recognizance to be of good behaviour for two years.  Those offences concerned investments for the purpose of locating a Spanish Galleon. 

17. On 21 February 1995 Mr Woolgrove was banned permanently from acting as a representative of a dealer or investment adviser under s 829 and s 830 of the Corporations Law.  He was prohibited from acting as such a representative at the time of this offence. 

18. A psychologist's report tendered on Mr Woolgrove's behalf referred to his long standing symptoms of depression, anxiety and low esteem and included the opinion that he suffered an adjustment disorder. It appears that he has worked in salvaging wrecks for a long time, with varying degrees of success.

Mr Phillips' personal circumstances

19. Mr Phillips was aged 29 to 30 years at the time of the offence and 36 years of age when he was sentenced on 13 June 2008. Mr Phillips had a number of convictions for fraud offences dating back to 1996. On 6 February 1996 he was convicted in the Melbourne County Court of 3 charges of obtaining a financial advantage. He was ordered to perform 300 hours unpaid community service work. On 18 December 1996 he was convicted of breaching the community based order and sentenced to nine months imprisonment to be suspended for two years. On 26 April 1998 he was convicted in the Dandenong Magistrates Court of 48 counts of attempting to obtain financial advantage and two counts of obtaining property by theft. He was fined an aggregate of $10,000. On 22 October 1998 he was convicted in the Dandenong Magistrates Court of one count of attempting to obtain a financial advantage and sentenced to two months imprisonment wholly suspended for 12 months. On 19 April 2000 he was convicted in the County Court of Victoria of one count of conspiracy to defraud the Commonwealth.  That offence related to a sales tax exemption fraud.  The sales tax avoided was $750,000.  He was sentenced to three years imprisonment to be released after serving 18 months upon entering into a recognizance in the sum of $1,000 to be of good behaviour for 18 months.  He was released from custody, having served that sentence, on 24 May 2000.

Procedural history

20. The indictment against Mr Woolgrove and Mr Phillips was presented on 6 August 2007 when the matter was listed for trial for eight weeks commencing 10 March 2008.

21. By late January 2008 Mr Phillips had informed the Commonwealth Director of Public Prosecutions of his intention to plead guilty and the court was informed of that at a mention on 29 February 2008. He was arraigned and pleaded guilty on 6 March 2008.

22. At the mention of the matter on 29 February 2008 it was indicated that Mr Woolgrove's matter should remain listed for the trial due to commence on 10 March 2008, but the matter was instead listed for mention on that date and Mr Woolgrove pleaded guilty.

23. Mr Woolgrove cooperated in proceedings under the Proceeds of Crime Act 2002 (Cth) by consenting to a direction that the proceeds of the sale of a home unit in which he held a beneficial interest be applied in full satisfaction of a pecuniary penalty order. 

Sentencing remarks

24. The sentencing judge referred to the matters summarised above. His Honour then related those matters to the appropriate criteria expressed in s 16A(2) of the Crimes Act 1914 (Cth) and discussed comparable sentencing decisions.  I will refer in more detail to his Honour's reasons in the course of my discussion of the submissions made on behalf of the applicants.

Differentiation in each applicant's role

25. On behalf of Mr Woolgrove it is submitted that the sentencing judge failed to differentiate between the significance of the roles of Mr Phillips and Mr Woolgrove. It is submitted that Mr Woolgrove was less culpable than Mr Phillips.

26. In that respect his Honour said:

"You were both directly involved in the operation of the scheme.  You were equally involved in the scheme, at least from the point where it was made available to Australian investors.  You both benefited substantially from the proceeds of the scheme.  The New Zealand administrators received instructions from both of you."

27. Those statements are virtually direct quotes from the agreed statement of facts. His Honour was correct to focus upon the point of time when the scheme was made available to Australian investors and required registration, that being when the offences were committed.

28. The submission on behalf of Mr Woolgrove emphasises the more direct and substantial role of Mr Phillips in giving instructions to lawyers and accountants concerning the setting up and administration of the scheme and management of the funds raised by it. That Mr Woolgrove's name did not appear in the documents is perhaps explicable by the banning order to which he was subject, but in addition to the facts to which I have already referred, the statement of agreed facts includes reference to evidence (from employees of the New Zealand firm of accountants who provided accounting services for the administration and management of the scheme) that instructions were provided by each of the applicants and, in terms, that "they were equal partners in the venture which was HUT". There was also the evidence that Mr Woolgrove dealt directly with two investors; that he was involved in a transaction with one Mr Souter, who acted for both applicants in promoting or selling the scheme; and that he was directly involved in promoting the HUT through a stall at a "diving expo" in Brisbane in September 2002, for which Phillips had made the initial contact and arrangements with the organiser.

29. In my view there can be no criticism of his Honour's conclusion that there was no basis for distinguishing between the applicants' respective roles in the offence.

Recklessness rather than deliberate fraud

30. It is submitted on behalf of both applicants that the sentencing judge erred by sentencing them on the basis that their culpability exceeded that of recklessness. This is submitted to be evidenced by his Honour's statement, as follows:

"Mr Phillips, your plea of guilty is an acknowledgement that you were reckless as to the requirement of registration.  That means that you must have been aware that the scheme might require registration in Australia.

In your case, Mr Woolgrove, your conviction in 1998, means that you would have been aware of the requirement of registration."

31. The fault element of recklessness applicable here arose only in relation to the requirement for registration of the managed investment scheme. In other respects the requirement as to intention related to the conduct of operating the scheme: Criminal Code 1995 (Cth), s 5.6.  Subsection 5.4(4) allowed the fault element of recklessness to be satisfied by proof of intention, knowledge or recklessness.  The sentencing judge in terms accepted the submission on behalf of the respondent that each applicant was at least reckless in terms of the Criminal Code 1995 (Cth) s 5.4(1) as to the requirement for registration.  The pleas of guilty themselves acknowledged the necessary element of recklessness.  That the scheme was of a kind that might require registration and was not registered was also suggested by various comments in the information memoranda.

32. It is clear from the passage quoted above that the sentencing judge sentenced Mr Phillips on the basis only of his recklessness as to the requirement of registration.

33. Similarly, in its context, in my opinion, the passage in the sentencing remarks quoted above does not convey that Mr Woolgrove was aware that he was involved in operating a scheme that in fact required registration but was not registered.

34. Although Mr Woolgrove's previous conviction and various passages in the statement of facts might have supported the view that Mr Woolgrove's culpability was of a higher order, it is clear from the transcript of submissions made to the sentencing judge that his Honour appreciated both that he was not dealing with a fraud offence and that the relevant mental element in this case was that Mr Woolgrove was aware that there were requirements for registration which might apply in this case.  Further, had the sentencing judge sentenced on the basis upon what it is now contended on behalf of Mr Woolgrove that the sentence was imposed, Mr Woolgrove's sentence should have been substantially higher than that of Mr Phillips.  Instead, his Honour sentenced each of the applicants to two years imprisonment.  (The explanation for the earlier release date in the case of Mr Phillips given by his Honour was that it reflected the onerous conditions in which he was held in custody in Brazil).

35. Contrary to the submissions made on behalf of both applicants, in my respectful opinion, the sentencing judge gave proper weight to the fact that the basis of the prosecution case was recklessness rather than fraud.

Misleading statements in the information memoranda

36. It is submitted for both applicants that the sentencing judge was wrong to take into account the matters referred to in paragraphs (a) – (e) at the end of the quote in paragraph [13] above, and particularly the statement in subparagraph (e) that the information memoranda contained "at least controversial, if not potentially misleading information" and the examples in (i) - (iv) of that subparagraph.  The submission is that the sentencing judge thereby sentenced the applicants for offences with which they were not charged.

37. That submission must be rejected. The portion of the sentencing remarks which recorded those facts was virtually a direct quote from the agreed statement of facts. Those matters demonstrated that the information memorandum used to attract the Australian investments could not have been so used had the applicants not committed the offence with which each was charged. It is clear that the sentencing judge did not sentence either applicant for making misleading statements in the information memorandum.

Amount lost

38. It is next submitted that the sentencing judge erred in saying, in relation to the agreed total amount invested by the Australian investors of US$590,490 that:

"That amount has not been recovered although there was some vague reference to the possibility of some of it being recovered from Mr Hatcher."

39. I would reject that submission. As the agreed statement of facts revealed, 130 Australians invested a total amount of US$590,490 in the Hatcher Unit Trust between 29 January 2002 and 13 May 2003.  It was also an agreed fact that each of Mr Phillips and Mr Woolgrove "directly and significantly benefited from the proceeds of the scheme".  It was not contended that any of the US$590,490 invested by Australian investors had been recovered. 

40. What was said on behalf of Mr Phillips as to the possibility of any recovery of the money from Mr Hatcher, or otherwise, was appropriately described by the sentencing judge as "vague". It was submitted to the sentencing judge on behalf of Mr Phillips that action was being taken in the High Court of New Zealand against lawyers who had been involved in the creation of the scheme on the instructions of Mr Phillips and also against Hatcher for damages for breach of contract. It was submitted that Hatcher had located a wreck that he was contractually obliged to USAL to raise and that had he done so it might be that the investment would have succeeded; but the only suggestion that Hatcher had in fact located a wreck came from Hatcher.

41. There was no material before the sentencing judge which justified the view that there were good prospects of success in either claim. For example, in relation to the claim against the solicitors, there was nothing before the sentencing judge to indicate what instructions were given to the solicitors; nor was there anything to indicate that any successful action against Hatcher would lead to the recovery of any money from him.

42. In these circumstances the judge's statement about the "vague reference" to the possibility of recovery was perfectly accurate.

Mr Phillips' custody in Brazil

43. After the period during which Mr Phillips committed the offence he moved to Brazil to live there with a partner.  (There is no suggestion that he sought to flee).  Mr Phillips was arrested in Brazil on 29 November 2005 following a request for his extradition by the Australian authorities to the authorities in Brazil.  He consented to that extradition request but remained in custody until he arrived in Australia on 8 February 2006, a period of 71 days, after which he was granted bail in the Brisbane Magistrates Court.  The sentencing judge accepted that the conditions of Mr Phillips' detention in Brazil were harsh.  He was confined in a small cell with 15 other prisoners.  A fluorescent light remained on all day and night.  Food and drink were limited to rice and water, the toilet was a hole in the floor,  and there was little opportunity for exercise. 

44. Contrary to a submission made on behalf of Mr Phillips, the sentencing judge did give weight to the fact that Mr Phillips had spent 71 days in "atrocious conditions" in a Brazilian prison. His Honour accurately summarised the conditions in the Brazilian prison in the terms used in the submission made on behalf of Mr Phillips. His Honour concluded that, in addition to the declaration of 71 days pre-sentence custody, it was appropriate to make an allowance for this matter by reducing the period of Mr Phillips' actual custody by one month.

45. It was submitted for Mr Phillips then that this was an inadequate allowance. Reference was made in this context to R v Allingham, Landsdowne, Marshall and Booth^[5].  Cullinane J there referred to the fact that a sentencing judge (Thomas J) had treated 18 days in pre-sentence custody of an offender as the equivalent of 18 weeks for the purpose of abating the time required to be spent in prison.  Thomas J made that allowance because of the then notorious overcrowding and poor conditions in the Brisbane Watchhouse.  The question of the appropriateness of any allowance in that respect appears not to have been an issue in this Court in R v Allingham and it was not the subject of any comment in the judgments in that case. 

46. The appropriate additional allowance for a factor of this kind is not a matter which is capable of arithmetical calculation. No error has been demonstrated in the additional allowance of one month made by the sentencing judge.

Mr Phillips' cooperation with the administration of justice

47. There is no substance in the submission made on behalf of Mr Phillips that the sentencing judge failed to give any weight to Mr Phillips' cooperation with the administration of justice, including his consent to be extradited to Australia.  In the course of referring to the matters which s 16A(2) of the Crimes Act 1914 (Cth) required the court to take into account, the sentencing judge referred in specific terms to Mr Phillips having consented to the extradition request. 

Pleas of guilty

48. The sentencing judge made it clear that the pleas of guilty in both cases were taken into account in determining the appropriate sentence. His Honour referred specifically to the requirement in s 16A(2)(g) that required the court to have regard to those pleas of guilty. His Honour also expressly took into account the prospects of rehabilitation, as required by s 16A(2)(n) of the Crimes Act 1914 (Cth).  The sentencing judge observed that the pleas of guilty showed that both applicants accepted responsibility for their offences and demonstrated a willingness to facilitate the course of justice.  His Honour noted that the pleas of guilty and other mitigating factors would be reflected in orders for release upon recognizance.  Contrary to the submissions made for both applicants, there is no basis for thinking that sufficient weight was not given to those pleas.

Disruption to Mr Phillips' life in attending to court commitments

49. As a consequence of Mr Phillips having moved to Brazil to live and conduct his business, after he was brought before the court he encountered inconvenience and expense in travelling from Brazil to Queensland to meet his bail conditions and in being unable to return to his residence and business in Brazil.  After Mr Phillips pleaded guilty he was required to live in Australia under the terms of a criminal justice visa for three months.  He could not then accept employment.  It is submitted on behalf of Mr Phillips that the sentencing judge did not take those matters into account or give them sufficient weight.

50. It is clear enough, however, that the sentencing judge took this history into account. His Honour referred expressly to Mr Phillips' arrest in Brazil, his residence and business interests there, and his transport to Australia.  In any event, I do not accept that these matters justified any significant reduction in the sentence.  They were a consequence of Mr Phillips' choice to leave Australia and reside in Brazil in circumstances in which he had earlier committed an offence in Australia

Delay in prosecuting Mr Woolgrove

51. It is submitted on behalf of Mr Woolgrove that the sentencing judge failed to give any weight to the lengthy delay of more than three years between the time of his arrest and the presentation of the indictment.

52. In R v L; ex parte Attorney-General of Queensland,^[6] this Court held that the lapse of time between the commission of the offence and the imposition of sentence should ordinarily not be a mitigating factor in the sentence unless that delay had resulted in some unfairness to the offender.  The principle was expressed in terms which required the offender to discharge a burden of proof that the unfairness complained of existed and was caused by a "failure to prosecute his case more quickly".  The Court gave two examples in which there might be such unfairness which should be held to mitigate the sentence that otherwise would have been imposed.  The first example was where delay between the date of apprehension of the offender (or the first indication to the offender by the authorities of a likely prosecution) and the day of the sentence resulted in the offender having had his liberty curtailed or his reputation called in question or, at least, being left in a state of uncertainty caused by a failure to prosecute his case more quickly.  The second example given by the court was where the time between commission of the offence and the sentence was sufficient to enable the court to see that the offender had become rehabilitated or that the rehabilitation process had made good progress. 

53. In R v Tiburcy; R v Gardner; R v Zeuschner^[7], Maxwell P quoted the following passage from the judgment of Chernov JA in R v Cockerell^[8]:

"The courts have ... recognised that such delay which, as here, cannot be attributed to the offender, constitutes a powerful mitigating factor at a number of levels – see, for example, Miceli, Todd, Schwabegger, MWH, Blanco. First, and perhaps foremost, where there has been a relatively lengthy process of rehabilitation since the offending, being a process in which the community has a vested interest, the sentence should not jeopardise the continued development of this process but should be tailored to ensure as much as possible that the offender has the opportunity to complete the process of rehabilitation. Secondly, from the point of view of fairness to the offender, the sentence should reflect the fact that the matter has been hanging over his or her head for some time, thereby keeping the offender in a state of suspense as to what will happen to him or her. ... As Wood CJ at CL said in Blanco:

' ... it remains the fact that it is highly desirable that the prosecuting authorities act promptly where they have evidence of serious criminality. If they fail to do so, then they must expect that circumstance to be taken into account in sentencing. It is in the public interest that those who are suspected of serious criminality be brought to justice and be brought to justice quickly, particularly where there is a strong case available against them.'"

54. Here neither Mr Phillips nor Mr Woolgrove attempted to rebut the prosecutor's submissions at the sentence hearing to the effect that the prosecution could not have proceeded more quickly. The prosecutor explained the complications that arose during the course of the committal which included a necessary visit to New Zealand to take evidence.  When the sentencing judge referred during the course of the argument to the fact that it was not suggested on behalf of the applicants that the case could have been investigated or prosecuted more quickly, the fact was confirmed by counsel for the respondent.

55. Fastening on these facts, it was submitted for the respondent that the authorities required that this delay should be disregarded because it was not the product of any fault on the prosecution side.

56. I do not accept that view of the authorities. In R v L; ex parte Attorney-General of Queensland^[9], this Court left open the possibility of mitigation attributable to a lengthy delay between commission of an offence and sentence involving general notions of fairness.  Of course there must be an excessive delay before the principle applies.  But in my opinion, where an offender bears no responsibility for excessive delay in sentencing which was productive of unfairness to the offender, that delay may be taken into account whether or not it was attributable to any fault on the prosecution side.  Subsequent decisions of this Court applying the same principle do not suggest a contrary view.^[10]  The judgment of Tadgell JA in R v Miceli^[11] and the decisions cited in that case – particularly R v Todd^[12] - also support the view that the fact that unresolved charges are hanging over the head of an offender for reasons not attributable to the offender  may itself justify some mitigation of the sentence.

57. The remaining question in this application is whether the sentencing judge erred by failing to make any such allowance for the delay as was justified on the facts. In my opinion, there was no such error. In order to explain why I reach that view it is necessary to refer to the facts in a little more detail.

58. The offending took place between 3 June 2002 and 14 May 2003. Mr Woolgrove was arrested and charged about 12 months thereafter, on 17 March 2004. By 15 March 2005 confiscation proceedings against Mr Woolgrove had been finalised.  The charges against both applicants also included fraud charges, which were dismissed after a lengthy committal on 25 May 2007.  The indictment was then presented on 6 August 2007 and it was set down for trial in March 2008.  Counsel for Mr Woolgrove directs his argument to the period of time between 17 March 2004 and 6 August 2007.  He submits that this period in excess of three years was not attributable in any respect to conduct by Mr Woolgrove. 

59. It is submitted for Mr Woolgrove that there had been a process of rehabilitation within that period, evidenced by the absence of any further convictions. Reference is also made to the fact that the charge was hanging over his head for that period of time and to the report of a psychologist indicating how the delay had affected Mr Woolgrove over that period.  The psychologist opined that Mr Woolgrove's appreciation of the gravity of his situation, in conjunction with the protracted nature of the proceedings against him, had caused him to become "highly vulnerable at a psychological level"; and that the wide range of symptoms from which Mr Woolgrove continued to suffer "have been compounded by the protracted nature of these proceedings".

60. The sentencing judge took those matters into account. His Honour said in terms that he had taken into account the psychologists' report tendered on behalf of Mr Woolgrove.  In that way his Honour took into account the particular effect of the lengthy delay in the prosecution upon Mr Woolgrove.

61. As I earlier mentioned, his Honour said that the pleas of guilty and other mitigating factors would be reflected in the orders for release upon recognizance. In the case of Mr Woolgrove, the order was that he be released after serving six months of a two year term of imprisonment; that is to say, he was to be released after serving one-quarter of his term. 

62. In sentences for federal offences the non-parole period should be arrived at without reference to the specific statutory predisposition in Queensland favouring a point which is not later than the mid-point of the head sentence.^[13]  The appropriate length of a pre-release period relative to the term imposed for a federal offence of course turns on the manner in which the sentence is structured and the particular facts, and it may also vary according to the nature of the offence.  At least for some offences it has been said that it is usually about 60 per cent.^[14]  For federal offences of the present character, the two most closely comparable decisions are La Rosa v The Queen^[15] and Bell v The Queen^[16], both of which involved first offenders with excellent antecedents and prospects of rehabilitation.  Personal deterrence was not a factor in either of those cases, whereas it does have some significance here in light of the previous convictions of the applicants.  In those decisions, the pre-release period was half of the overall term of imprisonment.  The pre-release period specified for Mr Woolgrove was one-quarter of the term.  (It was a slightly greater proportion than Mr Phillips).

63. In these circumstances, there is in my respectful opinion no basis for thinking that inadequate allowance was made by the sentencing judge on account of the delay and its effects in the proceedings against Mr Woolgrove.

Range within which the sentence should have been imposed

64. The maximum penalty for the offence was imprisonment for five years or a fine of $22,000 or both.

65. It was submitted on behalf of both applicants that the sentencing judge erred in sentencing at the highest end of the range suggested on behalf of the respondent (18 months to two years imprisonment) instead of at the lowest end of that range.  Issue was not taken with the appropriateness of the range itself.  In my respectful opinion it cannot be said that two years imprisonment was excessive for either applicant in circumstances in which each applicant had relevant criminal records and was centrally involved in, and significantly and directly benefited from, the operation of a scheme that induced Australian investors to contribute US$590,490, none of which has been recovered. 

66. It seems remarkable that so much money was contributed on the faith of such an obviously shallow and incomplete information memorandum containing such vague and unsubstantiated suggestions of incredible returns, but as Handley J observed of a cognate provision of the earlier law, the prohibitions apply "whether the scheme is fraudulent or honest, foolish or careful, profitable or unprofitable."^[17] 

67. The applicants' criminality essentially derived from their reckless failures to satisfy themselves before accepting investments from the public that the investment scheme did not require registration. Because recklessness rather than some higher degree of culpability was involved, the degree of the applicants' criminality was not of the highest order. It is also true that some other cases involved the raising of much greater sums, but the amount here raised was undoubtedly substantial. Those matters are reflected in the sentence.

68. The sentencing judge correctly observed that although general deterrence was not specifically listed in s 16A of the Crimes Act 1914 (Cth) as one of the matters to be taken into account, it was nevertheless an important consideration.  Personal deterrence was also an important factor in both cases, and particularly in the case of Mr Woolgrove in view of his relevant conviction and banning order, as the sentencing judge also observed.

69. The sentencing judge referred to comparable decisions which in my respectful opinion do establish that the sentences in this case were well within his Honour's sentencing discretion.

70. La Rosa v The Queen^[18], involved a scheme under which a salesman had earned commission of $188,000 from $1.8 million paid to him by investors.  The aggregate loss including interest was some $1.2 million.  That loss was therefore higher than in this matter, but the salesman there was neither an instigator nor a controller of the scheme, and he had no prior convictions.  He cooperated with the authorities, returning to Western Australia from Malaysia where he was then resident in order to be interviewed by investigators.  He pleaded guilty at an early stage.  He also undertook to give evidence against other participants in the scheme.  The Western Australian Court of Criminal Appeal accepted that the offender was not guilty of fraud or dishonesty but recklessly relied upon assurances given by another participant, Bell, that the scheme was within the law.  As in this case, the view of the court was that had the applicant attempted to have a deed approved, the fatal flaws in it would have been exposed and the deed would not have been approved.  La Rosa's criminality arose from his failure to take proper steps to ascertain the true legal position concerning the scheme and to have the deed approved.  The scheme in that case was speculative and lacked substance, crying out for independent professional advice.  The court imposed a sentence of two years imprisonment with a non-parole period of one year, which included a reduction of six months as a result of the applicant's co‑operation with the authorities.

71. In Bell v The Queen^[19], the Court of Criminal Appeal of the Supreme Court of Western Australia dismissed an appeal against a sentence of two years and 10 months imprisonment with a recognizance release order after 17 months.  Steytler J, with whose reasons Malcolm CJ agreed, emphasised the importance of general deterrence.  His Honour said^[20]:

"It should be made known to those who may be disposed to not comply with the disclosure requirements of the Corporations Law, as those requirements exist from time to time, that they might, in that event be severely dealt with.  They should know that this is especially so if considerable sums are to be placed at risk."

72. Bell's sentence was considerably more severe than that of La Rosa.  Although on the evidence Bell was himself a dupe - he had recruited La Rosa, had a more central role, and his plea of guilty came at the last moment and in circumstances which demonstrated little contrition.

73. Those decisions support the view that the sentences imposed here were within the judge's discretion.

74. The applicants' counsel submitted that the most relevant comparable decisions were R v Taylor^[21] and R v Loveday and Balacco.^[22]

75. In R v Taylor, the offender was sentenced in the District Court of New South Wales for similar offences to a term of imprisonment of 12 months with a recognizance release order after six months.  Taylor had a relevant previous conviction although it had occurred some 10 years earlier.  Contrary to the submission in this Court that the amount of the loss was in excess of $500,000, the loss as a result of the offending was in fact only $326,550.85.  An additional amount of some $227,000 was lost when the investments of two investors were reinvested and lost on another investment which did not involve any contravention.^[23]

76. In R v Loveday and Balacco, Loveday was sentenced in the District Court of South Australia to one year and eight months imprisonment, with a recognizance release order after serving six months of that term and Balacco was sentenced to a term of 14 months imprisonment, to be released immediately upon a recognizance release order.  The amount of the investors' losses in that case was very much higher than here: it was calculated as being $5.8 million.  On the other hand, neither of those offenders had any experience operating a business, neither of them benefited from the scheme, and each of those offenders was of previous good character with no convictions.  Each of those offenders, upon being advised of the precariousness of their positions, went immediately to the Australian Securities and Investments Commission and advised it of the difficulties and cooperated fully thereafter.  Each pleaded guilty to the charge at the earliest possible time.  Balacco's very moderate sentence was also explained by the fact that he was only an employee when the scheme was first set up; even after he became a director with Loveday, Loveday remained the person principally involved in the operation of the scheme.

77. The facts of Taylor or Loveday and Balacco are therefore very different from these matters.  I do not regard either decisions as of being of any particular assistance in determining the appropriate sentencing range in these matters.

78. The respondent also referred to R v Hunter & Milner^[24] in which the Court of Appeal of the Supreme Court of Victoria imposed total effective sentences of two years and nine months, with a recognizance release order after serving 12 months of those sentences.  Those were more serious offences.  Those offenders encouraged fellow church members and other acquaintances to invest some $4 million in reliance upon various misrepresentations concerning high risk schemes promising absurd short term returns.  The schemes collapsed, as all such schemes eventually do, with a total loss of some $3.5 million of capital.  Those offenders' criminality was of a higher order than in this case; they determined to embark upon a second scheme at a time when they must have known that the first scheme was a failure.  The case is therefore not of much assistance here, but a comparison between the overall effects of those sentences with those here does not suggest that these sentences are manifestly excessive. 

79. In the light of the decisions I have discussed and having regard in particular to the very early recognizance release dates fixed for each applicant, there is in my opinion no ground for thinking that either sentence was manifestly excessive or, indeed, excessive at all.

Disposition

80. I would refuse each application for leave to appeal against sentence.

81. MACKENZIE AJA:  I have had the opportunity to read, in draft form, the reasons of McMurdo P and Fraser JA.  Subject to what is said below with regard to the issue of delay, I agree with those reasons. 

82. The essential chronology for the purpose of considering whether, as the relevant ground of appeal alleges, the learned sentencing judge failed to give any weight to the delay in the proceedings is that the applicant Woolgrove was arrested on 18 March 2004 and charged with the offence to which he ultimately pleaded guilty and an offence of fraud under s 408C(1)(b) of the Criminal Code (Qld).  Phillips had moved to Brazil after the offences were committed; there was no suggestion he had fled there.  He was arrested there on an extradition warrant on 29 November 2005.  He did not contest the extradition and was returned to Australia on 8 February 2006.  According to the record, by that time the committal proceedings in respect of Woolgrove were pending and the evidence against Phillips was heard in conjunction with those proceedings, without any delay being caused by Phillips’ return to Australia. 

83. The committal was not concluded until 25 May 2007. It was not an unproductive committal since the Magistrate refused to commit on the fraud charge. No information of a specific kind was placed before the learned sentencing judge as to why the committal proceedings had taken as long as they did to be completed. Apart from the disclosure in the record that some evidence had to be taken in New Zealand, where some of the activities preliminary to the commission of the offences occurred, the record only discloses, self evidently, that they were “lengthy”. It is common experience that if a committal is a lengthy one the need to adjourn the hearing without completing it in one period is almost inevitable. The date for resumption is dictated by calendaring considerations, often influenced by counsel’s availability as well the availability of a suitable block of court time. The observation by the Crown Prosecutor that the matter had “proceeded regularly for a matter of this type” was not contradicted at sentence by counsel for the applicant Woolgrove or Phillips.  Nor was it suggested that the delay was the fault of the prosecuting authority.  Equally it was not suggested that the applicant was in any way responsible for it.

84. It was submitted that the delay of over three years in the matter proceeding from arrest to committal entitled the applicant Woolgrove to a reduction in his sentence because of the delay. In support of the submission, it was said that there was evidence from a psychologist that protraction of the proceedings had had a psychological effect on him.  Also, the applicant Woolgrove had not offended again in the period between arrest and sentence.  He had engaged in gainful employment of a blue collar type during the relevant period. 

85. As well as relying on the second aspect of delay referred to in R v L; ex parte Attorney-General [1996] 2 Qd R 63; [1995] QCA 444, the applicant Woolgrove also relied on R v Tiburcy, Gardner & Zeuschner (2006) 166 A Crim R 291; [2006] VSCA 244.  In Tiburcy each of the applicants had been committed for trial on counts of drug offences, some of which involved trafficking in a commercial quantity of a drug of dependence.  The offences had occurred in the second half of 2002.  The committals occurred between March 2004 and June 2004.  The sentencing took place in November 2005.  Each of the applicants had made an offer, the latest of which was made 18 months before sentencing eventually occurred, to plead guilty to offences without the circumstance of aggravation alleging a commercial quantity.  The Crown ultimately accepted pleas to offences without the circumstance of aggravation.

86. It was said that the reason for the delay was that the pleas of guilty could not be accepted until evidence in relation to the quantities of drugs had been carefully reviewed. It can be inferred from the reasons of the court that the delay in being able to do so was related to resourcing problems on the prosecution side of the record. There was cogent evidence that each of the applicants had, in the period between their arrest and sentence, successfully rehabilitated themselves from drug use and had removed themselves from the drug scene. The matter also proceeded on the basis that there was no suggestion that the delay was solely or even partly the fault of the applicants. It was observed that if the delay had been the result of obstruction or lack of co-operation the position would likely be different. It was held in the circumstances that the sentencing judge erred in failing to address the very significant three year delay between the applicants’ apprehension and the sentences imposed in 2005 during which time the applicants had undergone significant rehabilitation on bail.

87. The present matter lacks some of the features that appear in Tiburcy.  There is nothing to suggest that the progress of the matter through the committal process was abnormal having regard to the kind of case.  The indictment had been presented quite promptly on 6 August 2007 and was set down for trial in March 2008.  More significantly, there was no timely offer by the applicant Woolgrove to plead to the charge upon which he had been committed and for which he was ultimately sentenced.  Eight weeks were set aside for the trial, which was anticipated at that time to be a joint trial with Phillips. 

88. When Phillips indicated in January 2008 that he intended to plead guilty, the applicant Woolgrove did not change his position. On his behalf, at the mention of the matter about two weeks before the trial was to commence, it was indicated that it should remain listed for trial. However, it was only within the period immediately before trial that he decided to plead guilty.

89. Although the issue of delay is not specifically mentioned in the sentencing reasons, it was not overlooked by the learned sentencing judge. It was the subject of discussion during submissions. It is plain from the interchange between him and counsel that he considered that the case was distinguishable from Tiburcy.  As has been demonstrated, that conclusion is correct. 

90. Further, the sentence imposed on the applicant Woolgrove is, in my view, not manifestly excessive, looked at in the context of the authorities referred to in the reasons of Fraser JA and the facts of the case. Each was given a release date that was within a proper exercise of discretion. The differential between Woolgrove’s sentence and that of Phillips is accounted for by the additional allowance given for the conditions Phillips was accepted to have endured while in custody in Brazil pending extradition.

91. I agree that the applications for leave to appeal against sentence should be refused.