R v Hoch [No 2][2023] QCA 200

SUPREME COURT OF QUEENSLAND

1. [1]
   THE COURT:  The applicant’s appeal against convictions on counts 1-4 was successful only in relation to count 2: R v Hoch [2023] QCA 179 (the reasons).  The parties had agreed that the applicant’s application for leave to appeal against sentence should await the outcome of the conviction appeal.  When the reasons were published, the Court ordered that the application for leave to appeal against sentence be adjourned to be decided on the papers.  Written submissions on sentence have been filed by the applicant and the respondent.
2. [2]
   The applicant seeks leave to amend the notice of appeal and substitute the following two grounds as the grounds for the sentence leave application:

2. 1.The sentence imposed on count 1 is not proper because it is unduly severe insofar as it required two years’ imprisonment to be served before the order for suspension takes effect.
3. 2.The sentences imposed on counts 5, 6, and 8-14 are not proper because they are unduly severe insofar as they are not to commence until 15 November 2024 and the length of the good behaviour period is too long.

3. [3]
   The respondent does not oppose leave being granted to amend the grounds of appeal.  That leave will be granted.
4. [4]
   It is also common ground between the parties that, as a result of the successful appeal against conviction on count 2, s 668F(1) of the Criminal Code (Qld) applies to permit the Court to “either affirm the sentence passed at the trial or pass such sentence, whether more or less severe, in substitution therefor, as it thinks proper, and as may be warranted in law by the conviction on the count or part of the indictment on which it considers the appellant has been properly convicted”.

Sentences imposed by the learned sentencing judge

5. [5]
   The trial took nine days from arraignment until verdict.  After the jury returned their guilty verdicts on 18 November 2022, the applicant was remanded in custody and sentenced on 21 November 2022.
6. [6]
   On count 1 (fraud, to the value of $30,000 or more), the applicant was sentenced to imprisonment for three years which was ordered to be suspended after serving a period of two years’ imprisonment and the operational period for the suspended sentence was three years.  The applicant was sentenced to 12 months’ imprisonment for each of the fraud counts (counts 3 and 4) and those sentences were ordered to be served concurrently with the sentence imposed for count 1.  (Orders for suspension of counts 3 and 4 were made by the sentencing judge but those orders would never take effect as such, as the date for suspension was the same as for count 1 which was after the full term of 12 months would be served.)  Counts 1, 3 and 4 were State offences.
7. [7]
   Even though the applicant was successful in the appeal against conviction on count 2 (general dishonesty contrary to s 135.1(1) of the Criminal Code (Cth)), it is necessary to note the sentence that was imposed for that offence as it affected the structure of the sentences.  On count 2, the applicant was sentenced to imprisonment for three years which was ordered to be served concurrently with the sentences imposed on counts 5, 6 and 8-14 but served partly cumulatively on the periods of imprisonment imposed on counts 1, 3 and 4 and was ordered to commence on 15 November 2024.  A recognisance release order was also made pursuant to s 20(1)(b) of the Crimes Act 1914 (Cth) that the applicant be released upon entering into a recognisance in the sum of $2,000 conditioned that he must appear to be sentenced if called upon within a period of four years and must in the meantime keep the peace and be of good behaviour.
8. [8]
   Each of counts 5, 6, 8 and 9 was the offence of flying aircraft as pilot in command without a licence contrary to s 20AB of the Civil Aviation Act 1988 (Cth) (Act) for which the maximum penalty was two years’ imprisonment.  Each of counts 10-14 was operating an aircraft in contravention of s 27 of the Act in that the operation of the aircraft was not authorised by an Air Operator’s Certificate (AOC) contrary to s 29 of the Act for which the maximum penalty was two years’ imprisonment.  For each of counts 5 and 10, the applicant was sentenced to 18 months’ imprisonment.  For each of counts 6 and 11, he was sentenced to four months’ imprisonment.  For each of counts 8, 9, 13 and 14, he was sentenced to eight months’ imprisonment.  For count 12, he was sentenced to one month’s imprisonment.  Each of the terms of imprisonment for counts 5, 6 and 8-14 were ordered to be served concurrently with each other and to be served partly cumulatively on the sentences imposed in relation to counts 1, 3 and 4.  Those sentences were ordered to commence on 15 November 2024 which the sentencing judge calculated was the date on which the suspension of the sentences for the State offences would take effect.  The same recognisance release order that was made in respect of count 2 was also made in respect counts 5, 6 and 8-14.
9. [9]
   A declaration was made in respect of six days spent in pre-sentence custody that applied to all sentences.

The relationship between the offences

10. [10]
    As a first step to explaining the relationship between the offences, it is relevant to set out [5] of the reasons:

“The appellant was a pilot who at the relevant times held a private pilot’s licence. He was a director of two companies The Flying Fitters Pty Ltd and Hoch Air Pty Ltd. Count 1 concerned the operation of flights for the transportation of Shane Knuth MP and/or his staff between 12 November 2011 and 25 November 2015. Count 3 concerned one flight for the Electoral Commission of Queensland for the transport of voting material between 1 and 10 February 2015. Count 4 concerned the operation of flights for the transportation of Robbie Katter MP and/or his staff between 25 October 2014 and 6 November 2015. Count 2 concerned the operation of flights for the transportation of Bob Katter MP and/or his staff between 2 December 2011 and 17 December 2015. Evidence was adduced that if one of the members of Parliament needed to be transported for electoral or parliamentary business a member of staff contacted the operator of planes such as the appellant. An arrangement was made for transport and after the flights an invoice issued on behalf of one of the two companies of which the appellant was a director for the flight that was undertaken. A staff member of the relevant Member of Parliament sent the invoice to the relevant authority in Brisbane (for counts 1 and 4) or Canberra (for count 2) and the authority paid the invoice. For the ballot material (count 3), the process was much the same and the Electoral Commission paid the invoice.”

11. [11]
    Count 1 involved 32 flights, count 2 involved 61 flights for the Federal MP, Mr Katter Snr.  There was only one flight involving cargo for count 3.  There were two flights for count 4.
12. [12]
    As outlined in [6]-[7] of the reasons, for each of counts 1-4, the prosecution’s case for dishonesty was particularised in the same terms that the applicant dishonestly gained a benefit when he issued invoices for the operation of commercial flights in circumstances where he knew that he and/or his companies were not entitled to receive payment because he did not hold an appropriate AOC.  As set out at [10] of the reasons, the applicant’s defence was that regulation 2(7A) of the Civil Aviation Regulations 1988 (Cth) (CAR 2(7A)) permitted the applicant who had a private pilot’s licence to operate without an AOC, if what he invoiced was the share of the cost of the flight.
13. [13]
    During the period of four years covered by counts 1-4, the applicant flew four different planes that are respectively the subject of each of counts 5, 6, 8 and 9.  The gravamen of those offences was that, if the prosecution could prove that the flights were charter flights rather than cost sharing arrangements within CAR 2(7A), the applicant committed the offences because he held a private pilot’s licence only rather than the requisite commercial pilot’s licence.  Counts 5, 6, 8 and 9 therefore covered flights that were the subject of counts 1-4.  Counts 10-14 also covered the flights that were the subject of counts 1-4 but the offence was based on the applicant’s flying the aircraft specified in each of the counts without an AOC.

Sentencing remarks

14. [14]
    The sentencing judge referred to counts 1-4 as the fraud offences and the balance of the counts on which the applicant was convicted as the aviation offences.  His Honour explained the approach to sentencing for the two categories of offences as follows:

“I take the view that the aviation offences were the means by which you committed the fraud offences, and so, are bundled up in your fraud offending in that sense. I will not be imposing wholly or partly cumulative sentences for the aviation offences because I see them all as the one part of the one transaction, in that sense.”

15. [15]
    The total amount that was invoiced for the flights covered by counts 1-4 was $370,000 in round terms.  Of that, just over $98,000 was received in respect of the flights the subject of count 1 and just under $258,000 was received in respect of the flights that were the subject of count 2.
16. [16]
    The sentencing remarks also included the following.  The applicant used what he perceived as a loophole in CAR 2(7A) to expand his business operations when he was charging on a commercial basis rather than limiting himself to sharing the costs of the flight with his passengers.  The applicant did provide the services for which he charged but he committed the offences while endeavouring to take advantage of the regulatory scheme for civil aviation.  The applicant was aged between 26 and 30 years at the time of the offending and was being sentenced as a 37 year old man with no prior convictions.  It was in his favour that formal admissions were made at the trial that shortened the trial by two to three days.  Upon the applicant’s arrest, his business went into administration and his family circumstances were such that his imprisonment would create hardship at home.  Imprisonment involving actual custody was the only appropriate sentence, because of the seriousness of breaches of the aviation regulatory scheme, the period of time over which the offending occurred, the significant payments that were actually received and that the offending involved 96 flights.  One of the complications was the interaction between the Commonwealth and State sentencing schemes.  Under the State scheme, an offender would usually be considered for release on parole after serving half of the head sentence or such earlier time as stated by the sentencing judge to reflect the matters in the offender’s favour.  Partial accumulation was an appropriate manner of approaching the overall sentencing with the sentences for the State offences imposed first, with the sentence for count 2 being partly accumulated on the sentences for the State offences, and with the aviation offences being served concurrently with the sentence for count 2.  That would also achieve a definite release date for the applicant.
17. [17]
    Treating the sentence of three years’ imprisonment for count 2 as a sentence of imprisonment (even though it was the subject of a recognisance release order), the structure of the sentences imposed by the sentencing judge was the partial accumulation of the sentences for the Commonwealth offences with the State offences which resulted in a notional period of imprisonment of five years with release by way of suspension of the sentence imposed for count 1 and the recognisance release orders for the Commonwealth offences after the applicant had served two years in custody which was 40 per cent of the notional period of imprisonment.
18. [18]
    Before the application of s 668F(1) of the Code and removing the sentence for count 2, the notional period of imprisonment resulting from the partial accumulation of the aviation offences on the sentence for count 1 is a notional period of imprisonment of three years and six months with release after two years in custody which would be after serving approximately 57 per cent of the notional period of imprisonment.

The applicant’s submissions

19. [19]
    The primary submission made on behalf of the applicant was that the sentencing judge would not have taken the course of suspending the sentence on count 1 at later than the halfway point of that sentence but for the need to impose an appropriate punishment for count 2.  That means that, with the quashing of the conviction on count 2, the reason for fixing the date of suspension for count 1 after two years of the sentence has been served no longer applies.  The applicant therefore seeks an order that the sentence imposed on count 1 be suspended after the applicant has served 18 months in custody and that the date for the commencement of the sentences for counts 5, 6 and 8-14 be 15 May 2024 in lieu of 15 November 2024.  The other variation that is sought is to substitute three years for four years in the recognisance release order as the period for which the applicant must be of good behaviour, on the basis that would better reflect the relationship between the obligation to be of good behaviour and the longest Commonwealth sentences of 18 months’ imprisonment for each of counts 5 and 10.

The respondent’s submissions

20. [20]
    The respondent submits that the orders sought by the applicant are “unduly lenient” and would have the effect of imposing an inadequate punishment for the aviation offences of counts 5, 6 and 8-14.  The approach taken by the sentencing judge to the sentencing of the aviation offences on the basis that they were “bundled up” in the fraud offences was available and appropriate at that time, but the quashing of the conviction on count 2 has the effect that 61 flights which formed the basis of the aviation offences are no longer “bundled up” in any fraud offence for which the applicant has been convicted.
21. [21]
    The respondent therefore submits that the criminality in the aviation offences that have not been covered by the sentences imposed on counts 1, 3 and 4 should be reflected in both the head sentence for those offences through accumulation on the sentence for count 1 and the time to be served in actual custody.  If a similar structure to that used by the sentencing judge were adopted, the sentence for count 1 should be suspended at the point which the Court considers appropriate for the applicant’s release and the sentences for the aviation offences commence on the same day.  The respondent submits that an alternative approach, if the Court considered that the criminality of the aviation offences were appropriately reflected in an increase to the head sentence only, would be for the commencement date of the sentences for those offences to be set after the date of suspension of the sentence for count 1 and partially accumulating them with the sentence for count 1.

The effect of the acquittal on count 2 on the other sentences

22. [22]
    The sentence on count 1 became “anomalous” due to the setting aside of the conviction on count 2: see R v Richards [2017] QCA 299 at [82]-[83] and [127].  The anomaly arose because the suspension of the sentence after two of three years of the sentence for count 1 had been served (which was more than half the sentence for count 1) was in anticipation of a further three year term for count 2 commencing on the date that the sentence for count 1 was suspended for which the applicant would be released under the recognisance release order.
23. [23]
    The respondent’s concern on the modification of the sentences is to ensure that there is punishment for the aviation offences that were also the subject of count 2 now that there is no longer a sentence for count 2.
24. [24]
    The structure the sentencing judge applied to the sentences made the sentences on counts 1 and 2 respectively the framework for the overall sentencing outcome.  Unless any of the sentences for the aviation offences is increased, the longest sentences for the aviation offences, namely 18 months’ imprisonment imposed on each of counts 5 and 10, will now provide that framework in conjunction with the sentence for count 1.
25. [25]
    The jury had been provided at the trial with a breakdown of the invoices that related to each of the counts (MFI “H”).  Whereas the invoices which were the subject of the fraud offences were allocated to each of counts 1-4 by reference to the passenger (or the cargo in respect of count 3), the invoices for counts 5-14 were allocated to each of the counts by reference to the specified plane that was used for the flights.  It is relevant that the plane that was the subject of counts 5 and 10 was used for flights that were the subject of 40 invoices.  In respect of those invoices, 26 of the invoices were for flights carrying Mr Katter Snr.  The plane that was the subject of counts 6 and 11 was used for flights that were the subject of four invoices.  The plane that was the subject of count 12 was used for a flight that was the subject of one invoice.  The plane that was the subject of counts 8 and 13 was used for flights that were the subject of 11 invoices.  The plane that was the subject of counts 9 and 14 was used for flights that were the subject of 11 invoices.
26. [26]
    It is implicit from the respective sentences imposed by the sentencing judge for counts 5, 6 and 8-14 that each sentence reflected the number of invoices allocated for that count.  The most serious sentence imposed for the aviation offences was the sentence of 18 months’ imprisonment for each of counts 5 and 10 that related to the same set of 40 invoices and that sentence was towards the higher end of the possible sentences, when the maximum sentence was two years’ imprisonment for each of the aviation offences.
27. [27]
    It is also relevant to consider the structure of the overall sentencing chosen by the sentencing judge to reflect the unusual circumstances applicable to the applicant’s offending.  In considering whether, and to what extent, to vary the sentences as a result of the removal of the sentence for count 2, the point at which the applicant is released from custody must reflect the fact that the overall notional sentence for all the offending must be less without count 2 which was, in fact, the most serious of the fraud offences with which the applicant was charged.
28. [28]
    The concern that the respondent expresses in connection with the modification of the sentences upon the removal of the sentence for count 2 is not borne out when more than half the flights that are the subject of counts 5 and 10 were for carrying Mr Katter Snr.  The sentence of 18 months’ imprisonment (subject to a recognisance release order) for each of those offences therefore provides punishment for aviation offences which were not the subject of counts 1, 3 and 4.
29. [29]
    The sentence proposed on behalf of the applicant provides for the suspension of the sentence of three years’ imprisonment for count 1 after the applicant has served 50 per cent of that sentence which would be 15 May 2024.  He would be at risk of returning to custody, if he committed any further offence punishable by imprisonment within four years of the effective commencement date of the sentence for count 1 of 15 November 2022.  If the sentences for counts 5, 6 and 8-14 then commenced accordingly on 15 May 2024, the applicant would also be subject to the terms of the recognisance release order from that date for the period applicable to that order.  If he was not of good behaviour during the period of that order, he could be required to serve the unserved balance of the sentences of imprisonment for those counts or otherwise be dealt with for the failure to be of good behaviour.  It therefore cannot be said that the sentence of 18 months’ imprisonment as the longest sentence imposed for any of the aviation sentences does not provide additional punishment for the applicant, even if the sentence commenced on 15 May 2024.  The period during which the recognisance release order operates should relate to the length of the sentences imposed for the aviation offences.  That period should therefore be reduced, as submitted on behalf of the applicant, from four years to three years.
30. [30]
    Varying the sentences as proposed by the applicant has the effect of making the notional period of imprisonment resulting from the partial accumulation of the aviation offences on the sentence for count 1 as three years with suspension after 18 months on the same date as the commencement of the sentences for the aviation offences, making the period of the recognisance release order apply until 15 May 2027, and otherwise preserving the structure that had been selected by the sentencing judge.  Those are the appropriate variations to make to the sentences for counts 1, 3-6 and 8-14 to reflect properly the removal of the sentence for count 2.

Orders

31. [31]
    The orders which should be made are:

2. 1.Leave to amend the notice of appeal to substitute the two grounds of appeal set out in paragraph 1 of the applicant’s outline of submissions for the sentence leave application dated 8 September 2023 as the only grounds relied on by the applicant for the sentence leave application.
3. 2.Leave to appeal granted.
4. 3.Appeal against sentence allowed.
5. 4.Vary the sentences imposed by the sentencing judge on 21 November 2022 by:

2. a.ordering that each of the sentences for counts 1, 3 and 4 is suspended after the applicant has served a period of 18 months’ imprisonment;
3. b.substituting 15 May 2024 as the commencement date for each of the sentences imposed on counts 5, 6 and 8-14 in lieu of 15 November 2024; and
4. c.substituting “three years” for “four years” as the period in the recognisance release order made for counts 5, 6 and 8-14 during which the applicant must keep the peace and be of good behaviour.

2. 5.The orders made by the sentencing judge in sentencing for counts 1, 3-6 and 8-14 are otherwise confirmed.