R v Ibbetson[2020] QCA 214

SUPREME COURT OF QUEENSLAND

1. [1]
   SOFRONOFF P:  I agree with Lyons SJA.
2. [2]
   PHILIPPIDES JA:  I agree with the orders proposed by Lyons SJA for the reasons given by her Honour.
3. [3]
   LYONS SJA:  On 16 March 2020, the applicant pleaded guilty to an eleven count indictment charging her with nine counts of obtaining a financial advantage by deception pursuant to s 134.2(1) of the Criminal Code Act 1995 (Cth) (the Code) and two counts of attempting to obtain a financial advantage by deception pursuant to ss 11.1 and 134.2(1) of the Code.  All of the offences had been committed in the 13 month period between 17 March 2014 and 12 April 2015.
4. [4]
   The applicant was sentenced to two-and-a-half years’ imprisonment to be released after serving ten months on a $1,000 recognizance to be of good behaviour for a period of two-and-a-half years.  Reparation in the sum of $200,553 was also ordered.  The applicant had no criminal history at the time of her conviction.
5. [5]
   She now seeks leave to appeal that sentence on the basis that the sentence is manifestly excessive and argues that relevant material in relation to the state of her mental health was not properly placed before the sentencing judge.
6. [6]
   The applicant is self-represented and in addition to that major ground she also raises a number of other matters in her outline of submissions.  These include a contention that she was prejudiced by a late change in advice from her barrister as to the likely sentence which might be passed.  She also argues that the effect of her incarceration on her daughter and the impact of COVID-19 on her in custody have not been taken into account.

Factual Background to the Sentences

7. [7]
   The applicant operated a mobile phone store in Coolum which sold mobile phone plans and handsets.  She was the sole director and joint shareholder of Coolum Telecoms Pty Ltd (Coolum) which traded as One Zero Coolum (Business).  Coolum held an ABN and was registered for GST.  The applicant’s Business sold Telstra mobile phones under a sub-dealership agreement with Vita Pty Ltd (Vita) whereby it would purchase mobile phones from Telstra and for each mobile phone that it sold, Telstra would pay Vita for both the cost of the phone and commission for the plan.  The Business would then claim against Vita for reimbursement of the cost of the phone and for the commission, of which Vita retained a portion.  Coolum was required to submit a business activity statement (BAS) to the Australian Taxation Office (ATO) on a quarterly basis.
8. [8]
   In August 2013, the ATO identified that Coolum had only lodged one BAS in the period between April 2011 and June 2013.  The applicant subsequently provided the figures and lodged the outstanding returns in October 2013.  That resulted in some refunds being paid to Coolum.  Between March 2014 and April 2015 however, the applicant amended three BAS returns that she had lodged in October 2013 and electronically lodged eight further BAS returns.  All of the returns included false and exaggerated figures for GST on purchases and refunds said to be owed.
9. [9]
   The lodgement of nine of these 11 returns caused the ATO to pay Coolum $200,553 in excess of its entitlement.  The last two returns lodged in early 2015, which comprise the two attempt counts, claimed an amount of $55,413 in refunds.
10. [10]
    The ATO commenced an investigation in July 2016 during which the applicant claimed the errors were due to her accounting software.  Whilst the applicant had been asked on 2 March 2017 to participate in an interview with the ATO, she had not taken advantage of the offer.  At the time of sentence, no restitution had been made.

The Sentencing Hearing

11. [11]
    At sentence, the Commonwealth prosecutor noted that the applicant’s only cooperation with the administration of justice was her guilty plea, given she had declined the opportunity to participate in an interview.  Whilst there had been a registry committal on 30 October 2018 and an indictment presentation on 16 March 2019, there had been some delay as the matter had taken a year to come to sentence due to issues in relation to the applicant arranging legal representation.  The prosecutor outlined the facts whereby the applicant had dishonestly obtained $200,553 and attempted to obtain a further $55,413 from the ATO over a 13 month period by lodging BAS returns on behalf of Coolum.  On each of the statements that the applicant lodged for the ten BAS periods, there was false information which resulted in her receiving refunds to which neither she nor Coolum were entitled.  Each amount was deposited into her business account to which she was a signatory.  Counts 8 to 11 were committed after the commencement of the audit into her Business.
12. [12]
    The prosecutor submitted that deterrence was a relevant factor, particularly given the impact which fraud has on the wider community and the fact that the BAS system relies on the honesty of those who participate in it.  It was submitted that a deterrent sentence should be imposed so that business owners are deterred from inflating the figures they include on their BAS returns to fraudulently obtain GST refunds.  Furthermore, it was argued that this was a course of conduct which was systematic and deliberate which resulted in a loss to the Commonwealth in excess of $200,000 where there had been no offer of reparation in relation to any aspect of the fraud.
13. [13]
    A number of decisions were relied on by the prosecutor at sentence.  The decision of Acosta v The Queen^[1] involved the lodgement of income tax returns containing false information.  In that case, the applicant received $33,181.40 from the ATO and attempted to obtain a further $56,601.15.  The head sentence was an effective head sentence of two years’ imprisonment with release on recognisance after six months.  Whilst the applicant there had a criminal history, it post-dated his offending.  He had also pleaded guilty at the earliest opportunity and had paid the money back by the time of sentence.  A significantly lesser amount was involved and the applicant there had good prospects of rehabilitation.
14. [14]
    The decision of R v Massey^[2] involved an undischarged bankrupt lodging 25 BAS claims with the ATO, where an amount of $257,655.45 was claimed using false invoices with an amount of $141,048.22 actually paid over a six month period.  Whilst the applicant there had a criminal history, it was referred to as minor.  In addition, he was extremely unwell and suffered from psychiatric problems at the time of offending.  He was sentenced to three-and-a-half years’ imprisonment with release on recognisance after 14 months.  Whilst it was a late plea, this Court held that the sentencing judge had not overlooked relevant factors including his health problems in imposing the sentence, and the sentence was not considered to be manifestly excessive.
15. [15]
    In R v Melrose,^[3] a former tax agent and undischarged bankrupt prepared 25 income tax returns for 10 individuals which were lodged with the ATO.  He produced false supporting documents whereby the ATO paid various taxpayers $182,287.23 and withheld refunds of $21,741.27, which was a total of $204,028.50.  Of that amount, an amount of $111,582.22 was remitted to Melrose after he made threats to the taxpayers.  He was charged with 23 counts of obtaining a financial advantage by deception contrary to s 134.2(1) of the Code and two counts of attempting to obtain a financial advantage by deception contrary to ss 11(1) and 134.2(1) of the Code.  He was 63 years old with a criminal history at sentence and was 52 to 53 years old at the time of the offending.  The sentencing judge took into account the 10 year delay and the exacerbation of the applicant’s depression caused by that delay, but nonetheless considered that the offending concerned a “relatively sophisticated fraud which was motivated solely by greed”.^[4]  It was held on appeal that a sentence of four years with a non-parole period of two years was not manifestly excessive even when regard was had to the issue of delay as follows:

“While the sentence imposed upon the applicant was greater than that in Massey, there were a number of distinguishing factors and, in some respects, the offending could be considered more serious.  Nor do any of the other comparatives outlined above demonstrate that the sentence imposed was manifestly excessive, even when regard is had to the matter of delay.  In Massey, McMurdo P observed that, unlike the position when sentencing for state offences, more commonly when sentencing federal offenders release dates are set to recognise mitigating factors at between the half to two thirds point of the sentence.  As to the recognition of the effect of delay, Holmes JA in R v Cox; R v Cuffe; R v Morrison reduced the sentence imposed on two of the offenders by one sixth.  Both of these authorities were referred to before the sentencing judge”.^[5]

16. [16]
    It is significant that the applicant’s counsel at sentence, after referring to the decisions of Melrose and Massey, indicated that he was not going to submit that two years was an appropriate penalty because it was too low and that a sentence in the order of three or three-and-a-half years would not be appropriate either.^[6]  He ultimately submitted that a sentence in the range of two-and-a-half years with the parole date set at around the one-third would be appropriate, although he argued that it could be reduced beyond that for cooperation.  He stated that whilst there was not a huge amount of cooperation in the initial investigation, once the matter came before the court there had not been any delay.  Ultimately, it was submitted that there should be an actual term of imprisonment in the order of two to two-and-a-half years with release on recognizance after serving slightly less than a year.

The Sentence Imposed

17. [17]
    The sentence that was ultimately imposed was in fact a sentence of two-and-a-half years on each count, to be served concurrently with a parole release date set after ten months upon giving security by recognizance of $1,000 conditioned upon good behaviour for two-and-a-half years.  It must be noted therefore that the sentence imposed was in fact the sentence that was submitted for by the applicant’s counsel at trial.
18. [18]
    An analysis of the learned sentencing judge’s sentencing remarks clearly indicates that he took into account the relevant principles as he was required to do pursuant to s 16A(2) of the Crimes Act 1914 (Cth).  In imposing the sentence that he did, the sentencing judge stated that whilst the matter had proceeded relatively efficiently, the offences had been committed over a substantial period of time and that there was an element of repetition or persistence in the applicant’s behaviour.  He also noted that the amount of money she obtained was substantial.  His Honour recognised that whilst deterrence was important, imprisonment was a sentence of last resort under Commonwealth sentencing legislation.
19. [19]
    The sentencing judge noted that the applicant’s personal circumstances were such that there were no outstanding features in her background which would explain her behaviour.  He noted that when she left school, she had worked for Telstra and that had led to her ultimately taking up the business of selling mobile phones.  Whilst he considered that the applicant found herself to have a reliance on using poker machines which had resulted in a substantial gambling addiction, that fact could not operate as an excuse for what she did given the serious nature of the offending.
20. [20]
    The sentencing judge also acknowledged that she had a 19 year old daughter who was supportive of her, and recognised that partly as a result of her offending, her long-term marriage had broken down and she had resorted to excessive alcohol consumption.  The sentencing judge also specifically recognised that the applicant had taken steps towards rehabilitation and that she had been to a number of doctors and a psychiatrist and had undertaken some counselling with Relationships Australia.  He considered that that meant she had insight into her offending and that she had done something about making sure she did not find herself in a similar position again.
21. [21]
    In imposing the sentence his Honour stated:

“Having regard to the cases to which I have been referred and as well having regard to the matters set out in section 16A of the Crimes Act, it is my view that imprisonment is the only appropriate sentence to impose today, but I will impose a sentence which is, in my view, the shortest sentence that is appropriate to reflect the need for deterrence but to also see you released from custody in the shortest amount of time that I think could be considered right so that you can try and get on with your life.  The effect of the sentences that I will impose will be that you are imprisoned for two years and six months, but you will be released after 10 months, and I will explain that to you in a few minutes.”^[7]

Application to Adduce Evidence

22. [22]
    As part of her submissions to this Court, the applicant argues that her mental health conditions were not taken into account and that her solicitors had not obtained material from the Sunshine Coast University Hospital and her general practitioner which should have been provided to the court.  Accordingly, she seeks leave to adduce new evidence, namely the Discharge Summary from the Sunshine Coast University Hospital dated 14 December 2017,^[8] and a Report from her psychiatrist, Dr Mohamed Milad, to her general practitioner Dr McKibbin, dated 12 May 2017.^[9]  As the latter document was in fact before the sentencing judge, the application would appear to relate only to the Discharge Summary.
23. [23]
    This Court has power to receive evidence that was not before the sentencing judge if the evidence indicates that a sentence, other than the sentence imposed, would have been warranted.  The respondent objects to the receipt of this new material on the basis that not only are litigants generally bound by the way in which their cases were presented, but that there must be finality in litigation.  Furthermore it is argued that not only was the material available at the time of sentence, but it would not have materially affected the sentence imposed as it was in fact taken into account.  It was argued that such additional evidence should only be admitted where the desire for finality in litigation is overborne by a need to avoid a miscarriage of justice and this is not such a case.
24. [24]
    In determining whether this Court should accept that new material I note that not only was the Discharge Summary available at sentence, but that it would have been very dated at the time of sentence.  The Discharge Summary was prepared some two years and four months prior to the sentencing hearing.  Furthermore, it refers to one specific episode which involved a deterioration of mood and suicidal ideation where there had been no further involvement by the hospital.  The Discharge Summary refers to the fact that whilst the applicant’s mood had deteriorated over the 12 months since the demise of her Business, the primary diagnosis was pathological gambling with a secondary diagnosis of a moderate depressive episode.  The Discharge Summary noted she had been seen by the acute care team during that period on two occasions but had been difficult to engage.^[10]  That document also indicates that the applicant resisted all follow up from the acute mental health team at the hospital because she intended to have future treatment with her private psychiatrist whom she had seen on 11 December 2017 and with whom she had scheduled a further appointment for 31 January 2018.  She did not attend that appointment and there was no further follow up with her psychiatrist.  She did not, on the evidence before the sentencing judge, have any further engagement with mental health professionals after 11 December 2017 as the letter from Dr Milad,^[11] tendered at sentence, made clear.
25. [25]
    I also note Dr Milad’s report, which was before the sentencing judge, noted that he had seen the applicant on 11 May 2017 but that she had “no known medical illness to explain her behaviour and no past psychiatric history”.^[12]  The diagnosis was gambling addiction with a secondary diagnosis of adjustment disorder with mixed anxiety and depressive symptoms.  He stated that she was currently employed and was very guarded in speaking about her problems.  She did not mention the gambling addiction until later in the interview but described anxiety symptoms.  He noted she was drinking ten cans of beer per night at that point in time and had been doing so for some two months.  He noted her mental state had deteriorated over the past six months, especially over the last two months, and that she had underlying issues in relation to gambling.  He stated that she had a gambling debt of $200,000, but postulated that in discussing her difficulties, she had minimised both the time she reported spending on poker machines and her reported losses which he identified as a gambling trait.  He noted she used to run a Telstra franchise but most likely closed it because it was not profitable.
26. [26]
    It would seem that the learned sentencing judge considered this dated material which was tendered in a favourable light and stated in his sentencing remarks that the applicant had some insight into what had led her to her offending and had taken some steps to make sure she did not find herself in a similar position in the future.  A less favourable view would have been that there was no up to date information about her mental health treatment and that the existing material indicated a fragile therapeutic relationship as she had not been open with her treating psychiatrist, had minimised her behaviour and was resistant to engagement in mental health treatment.
27. [27]
    The Discharge Summary is essentially unremarkable and contains no further information other than that the applicant had suicidal ideation on a particular date.  There is no doubt that this material was available at the time of the sentence.  It does not present any information that is new or that is of any great assistance to her.  In my view, the additional material is incapable of affecting the sentence passed, and a miscarriage of justice could not be occasioned due to it not being admitted.
28. [28]
    The applicant also argued that the effect that her incarceration has had on her daughter should also be taken into account, particularly in the context of the COVID-19 pandemic when restrictions resulted in the cancellation of personal visits.  In this regard, I note that no evidence has been adduced about the actual effect on her daughter but it is accepted that personal visits have been restricted since the declaration of stage 3 restrictions in prisons on 23 March 2020 (a week after the sentence was imposed).  The restrictions have however affected the entire prison population and their families and their imposition occurred after the applicant’s sentence was imposed.  This Court’s function is to consider the sentence imposed by the primary judge and circumstances which have arisen post-sentence are not a relevant consideration when considering the merits of the appeal.
29. [29]
    In any event, as the respondent argues, whilst the effect of the sentence on the applicant’s family is a relevant sentencing consideration, the principles referred to in R v Huston, Fox and Henke; Ex parte Director of Public Prosections (Cth),^[13] make it clear that the consequences need to be exceptional before they can affect the sentencing outcome.  In that case, the Court of Appeal held that the authorities indicate that hardship to a family should not ordinarily ameliorate a sentence which is otherwise appropriate unless the circumstances are highly exceptional or where it would in effect be inhuman to refuse to do so.  The Court noted that hardship and distress to families as a result of a term of imprisonment on a family member will inevitably be not beyond that commonly observed in courts as a result of the necessary punishment of wrongdoers.^[14]  In my view, as this possible hardship has occurred post-sentence and affects the prison population as a whole, it could not amount to exceptional circumstances that should have been taken into account by the sentencing judge.
30. [30]
    The application to adduce further submissions or further evidence in relation to events which have occurred after the imposition of the sentence on 16 March 2020 should therefore be refused.
31. [31]
    The applicant’s submission that she was in some way disadvantaged at sentence because she received late advice from counsel about the possible sentence which meant she could not receive alternative representation must be rejected.  The submission is completely without merit and irrelevant because any alternate representation could not change an outcome, namely, the sentence which was likely to be imposed by the sentencing judge based on appellate authority.

Is the Sentence Imposed Manifestly Excessive?

32. [32]
    The applicant argues that the decisions of Acosta v The Queen,^[15] R v Massey,^[16] and R v Melrose,^[17] which were relied upon at first instance by the Crown, were distinguishable from her case because they involved more sophisticated conduct involving false invoices or were cases where the applicants had prior criminal convictions.  The applicant argues that a sentence of greater similarity is the decision of R v Karam,^[18] which involved an elaborate scheme to defraud more than $1 million where a three year sentence of imprisonment with an immediate suspension was imposed.  The applicant argues in particular that in that case, the sentencing judge specifically took into account the stress and anxiety experienced by the defendant whilst awaiting sentencing.  The applicant argues that she also suffered increased anxiety levels and depression which were not given enough recognition by the sentencing judge.
33. [33]
    In this regard, I note that there was no evidence to this effect before the sentencing judge and the evidence the applicant now seeks to adduce about her mental condition and anxiety significantly predates the presentation of the indictment.  Furthermore in the applicant’s case, the complaint had been laid 12 months after she had been asked to participate in an interview and the indictment was presented eleven months after that.  The subsequent delay was not due to the DPP or the Court but was an indulgence to the applicant as she took some time to engage legal representation.
34. [34]
    As is well known, for an appeal court to be satisfied a sentence is manifestly excessive, the applicant must show that the sentence was so extreme or so severe that its severity by itself demonstrates that the judge made an error of some kind in the reasoning process.  It is not sufficient that a lesser sentence could have been imposed but rather it must be established that the sentence was manifestly excessive and not one that was open to the sentencing court.  A sentence is not shown to be manifestly excessive by simply pointing to other cases which are similar where a lesser sentence was imposed.^[19]
35. [35]
    In relation to the decisions relied upon by the applicant in her outline, it should be noted that the decision of R v Karam is a decision of single judge of the Victorian County Court and is not appellate authority.  Furthermore, the charge was under s 135.1 of the Code, which carried a five year maximum penalty and related to non-payment of PAYG tax instalments on cash payments he received, which caused a loss to the ATO.  The remaining charge related to his failure to withhold PAYG tax from wages and salaries paid to employees, and to remit that amount to the ATO.  Whilst he was sentenced on the basis that the amount of loss to the ATO was approximately $1 million, he was found by the sentencing judge to be a vulnerable, unsophisticated and relatively unintelligent man who had been preyed upon by others.  He was not the instigator of the scheme but was directed by others whilst somewhat aware of what was occurring.  There was also considerable systemic delay in proceeding through the courts and that delay, together with his personal circumstances, resulted in him being sentenced to three years’ imprisonment with immediate release.  Accordingly, there were some significant distinguishing features in that case.
36. [36]
    The other decision relied upon by the applicant is Police v Miller,^[20] which is an unreported Brisbane Magistrates Court decision where the defendant was sentenced on a plea of guilty to a charge of fraud as an employee with detriment caused in the sum of $75,519.71 pursuant to the Criminal Code Act 1899 (Qld).  Significantly, full restitution had been made at sentence.  The charges related to the misuse of a credit card on 18 occasions whilst the defendant was CEO of the Queensland Museum and Chief Scientist.  She obtained over $45,000 in the form of health insurance payments that were paid by her employer which she would not have been entitled to had she been truthful about her citizenship status.  She also used the credit card to purchase clothing, pay her mortgage and her daughter’s tuition fees at school.  The defendant did not have a criminal history, was otherwise a hardworking public servant who had surrendered into custody and had suffered public shaming due to her high profile position.  Ultimately, she was sentenced to three years’ imprisonment to be suspended after three months, with a three year operational period.  The head sentence imposed in that case does not in fact support an argument that the head sentence imposed in this case was manifestly excessive.
37. [37]
    In my view, the sentence imposed by the learned sentencing judge was in line not only with the appellate authorities relied upon at sentence but also the submissions of the applicant’s own counsel.  Furthermore, the respondent in this appeal has referred the Court to the decision of the Court of Appeal of the Supreme Court of Western Australia in De Hollander v The Queen,^[21] which supports the sentence imposed.  In that case, the appellant had pleaded guilty on the second day of her trial to three counts of fraud on the basis that she had not declared cash she had received during the course of conducting her garden business in her BAS returns.  Whilst the loss of revenue to the ATO was estimated to be in the order of $90,000, she was sentenced on the basis that she had intended to defraud a greater sum.  She suffered from a major depressive disorder and was a suicide risk at the time of sentence.  She was sentenced to three years’ imprisonment with a 20 month non-parole period which was not considered to be manifestly excessive on appeal.  There are some similarities with the applicant’s case, in that the fraud was part of a legitimate business and the appellant was otherwise of good character but was suffering from a depressive disorder.  However, the depressive disorder in that case was more significant than that experienced by the applicant.  It should also be noted that the appellant in that case received both a greater head sentence and a longer non-parole period for a fraud involving half of the amount involved here.
38. [38]
    Furthermore, the non-parole period set for release on recognisance was also in accordance with the principles outlined by Buss JA in De Hollander as follows:^[22]

“79 Where a sentencing court fixes a non-parole period, the non-parole period is part of the sentence. See R v Rajacic [1973] VR 636, 641; R v Hopkins [2008] NTSC 15; (2008) 22 NTLR 125 [12].

80 The fixing of a non-parole period serves the interests of the community rather than those of the offender, even though a minimum term confers a benefit on the offender. See Bugmy v The Queen [1990] HCA 18; (1990) 169 CLR 525, 531.

81 The non-parole period is the minimum period of imprisonment that justice requires the offender to serve. It mitigates the offender's punishment in favour of rehabilitation through conditional freedom after imprisonment for the minimum period. See Power v The Queen [1974] HCA 26; (1974) 131 CLR 623, 628 - 629; Deakin v The Queen [1984] HCA 31; (1984) 58 ALJR 367, 367; Griffiths v The Queen [1989] HCA 39; (1989) 167 CLR 372, 396; Bugmy (531).

82 The considerations which a sentencing court must take into account when fixing a non-parole period are the same as those applicable to the setting of the head sentence. However, the weight to be given to these factors, and the manner in which they are relevant, will differ in consequence of the different purposes underlying each function. See Bugmy (531).

83 The statements of principle by the High Court in Power, Deakin and Bugmy in relation to determining a non-parole period for a federal offence apply by analogy in determining whether a person who has been sentenced to a term of imprisonment for a federal offence should be released under s 20(1)(b), either forthwith or after he or she has served a specified period of imprisonment in respect of that offence.”

39. [39]
    The applicant has not therefore established that the sentence is manifestly excessive.
40. [40]
    I would make the following orders:

1. The application to adduce further evidence is refused.
2. The application for leave to appeal against sentence is refused.