Hili v The Queen

• Jurisdiction: Australia Federal only
• Judge: French CJ,Gummow,Hayne,Crennan,Kiefel,Bell JJ.,Heydon J.,Crennan JJ
• Judgment Date: 08 December 2010
• Neutral Citation: 2010-1208 HCA B,[2010] HCA 45
• Docket Number: S142/2010
• Court: High Court
• Date: 08 December 2010

[2010] HCA 45

HIGH COURT OF AUSTRALIA

French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel And Bell JJ

S142/2010

S143/2010

Anthony Joseph Luis Hili

Applicant

and

The Queen

Respondent

Glyn Morgan Jones

Applicant

and

The Queen

Respondent

Representation

J T Svehla with R J Webb for the applicants in both matters (instructed by Snelgroves)

P W Neil SC for the respondent in both matters (instructed by Commonwealth Director of Public Prosecutions)

Hili v The Queen

Jones v The Queen

Criminal law — Sentence — Principles — Federal offences — Applicants pleaded guilty to federal offences — Prosecution successfully appealed on ground of manifest inadequacy against head sentences and recognizance release orders imposed by sentencing judge — Court of Criminal Appeal stated that ‘the “norm” for a period of mandatory imprisonment under the Commonwealth legislation is between 60 and 66% [of head sentence]’ — Whether any judicially determined ‘norm’ for ratio between time to be served in custody by federal offender and length of head sentence imposed — How consistency in federal sentencing to be achieved — Whether sentences imposed by sentencing judge manifestly inadequate — Whether Court of Criminal Appeal's reasons sufficient.

Words and phrases — ‘manifest inadequacy’.

Crimes Act 1914 (Cth), Pt IB.

Judiciary Act 1903 (Cth), s 68.

ORDER

Matter No S142/2010

1. Special leave to appeal granted on grounds one to six inclusive of the draft notice of appeal.

2. Appeal treated as instituted and heard instanter, and dismissed.

Matter No S143/2010

1. Special leave to appeal granted on grounds one to six inclusive of the draft notice of appeal, but refused on ground seven.

2. Appeal treated as instituted and heard instanter, and dismissed.

1 French CJ, Gummow, Hayne, Crennan, Kiefel And Bell JJ. The applicants seek special leave to appeal against sentences imposed by the Court of Criminal Appeal of the Supreme Court of New South Wales, following a successful prosecution appeal against sentences that had been imposed on them in the District Court of New South Wales. The applicants had pleaded guilty, in the District Court, to offences committed in evading income taxation.

Proceedings and sentences in the District Court

2 Mr Hili pleaded guilty to one charge of obtaining a financial advantage by deception from a Commonwealth entity (the Commissioner of Taxation) contrary to s 134.2(1) of the Criminal Code Act 1995 (Cth) (‘the Code’). Mr Jones pleaded guilty to three charges: one of defrauding the Commonwealth contrary to s 29D of the Crimes Act 1914 (Cth) (‘the Crimes Act’), one of obtaining a financial advantage by deception from a Commonwealth entity (the Commissioner of Taxation) contrary to s 134.2(1) of the Code, and one of money laundering contrary to s 400.4(1) of the Code.

3 The applicants were friends. In 1997, they had formed a company to perform painting and carpentry contract work for the New South Wales Department of Housing. Mr Hili had then introduced Mr Jones to his accountants, a firm which carried on its practice in Burwood, New South Wales. Each thereafter used the firm to perform accounting work. It was this firm of accountants which later invited each applicant to participate in a scheme for evading taxation.

4 It was agreed, for the purposes of sentencing, that each applicant had evaded taxation that would otherwise have been payable in respect of the years ended 30 June 2001, 2002 and 2003 by a company or companies he controlled, and evaded taxation that would otherwise have been payable personally for the same years. Mr Jones was also alleged to have evaded taxation otherwise payable in respect of the years ended 30 June 2000 and 30 June 2004 by a company he controlled. Taxation was evaded by claiming deductible expenses for fees falsely said to have been paid by the relevant company. The amounts falsely claimed as deductions were passed through an international round robin of transactions. These transactions passed most of the money said to have been paid by the relevant company, through accounts in the names of companies owned and operated by an accounting and business advisory firm based in Vanuatu, into the hands of one or other of the applicants. The receipts were falsely described as loans by a foreign lender.

5 The frauds were effected over a long time. Mr Hili engaged in 15 round robin transactions between January and November 2002. He lodged false income tax returns for two companies and for himself for the year ended 30 June 2002, for one of the companies and for himself for the year ended 30 June 2003, and for the same company for the year ended 30 June 2004. Mr Jones engaged in 11 round robin transactions between April 2001 and February 2004. He lodged false tax returns for his company for the year ended 30 June 2000, for himself and for his company for the years ended 30 June 2001, 30 June 2002 and 30 June 2003, and for the company for the year ended 30 June 2004.

6 Mr Hili and his companies evaded taxation totalling $398,537.82. Mr Jones and his companies evaded taxation totalling $362,925.24. Having regard to penalties and interest, Mr Hili became liable to pay over $1 million to the Australian Taxation Office as a result of his conduct. Mr Jones was liable to pay an amount of between $900,000 and $1 million. At the time of sentence, Mr Hili had paid some of what was owing, and was realising assets to pay the rest. Mr Jones was also taking steps to pay what he owed.

7 In the District Court, Morgan DCJ sentenced Mr Hili to imprisonment for a total of 18 months, with a recognizance release order to take effect after seven months. Mr Jones was sentenced on each count to 18 months. Each sentence was made concurrent with the others. Again, a recognizance release order was made to take effect after seven months.

8 The sentencing judge noted that each applicant was previously of good character. Each had pleaded guilty at the earliest opportunity. Each had admitted his guilt in the course of interviews with police, and provided the authorities with what police believed to be ‘all information and assistance available to him’. Each undertook to co-operate with law enforcement agencies, including by giving evidence in any subsequent proceedings brought in respect of four named persons who were alleged to have been instrumental in establishing and operating the evasion scheme the applicants had used. The undertakings are enforceable through the mechanisms prescribed by s 21E of the Crimes Act (by which the Director of Public Prosecutions may appeal against the reduction of a sentence where promised co-operation is not provided). The sentencing judge took the view ‘that in each case the appropriate discount [on account of pleas of guilty and past and future assistance] is one of fifty per cent for the plea and the assistance of which twelve and a half per cent is referable to future assistance in accordance with the undertaking signed by each offender’.

Prosecution appeal to the Court of Criminal Appeal

9 The prosecution appealed against the sentences imposed, alleging that the sentences were manifestly inadequate. The Court of Criminal Appeal (McClellan CJ at CL, Howie and Rothman JJ) allowed 1 the appeal in respect of the single sentence imposed on Mr Hili, and allowed the appeal in respect of the sentences imposed on Mr Jones with respect to the first two counts, of defrauding the Commonwealth and obtaining a financial advantage by deception. On re-sentencing, the Court of Criminal Appeal sentenced Mr Hili to a term of three years with a recognizance release order to take effect after 18 months. Mr Jones was re-sentenced to a fixed term of 12 months on the first count (of contravening s 29D of the Crimes Act) and two years six months on the second count (of contravening s 134.2(1) of the Code) to commence six months after the commencement of the sentence for the first count. The effect of those sentences was that Mr Jones was to be imprisoned for three years. A recognizance release order was made to take effect after 18 months' imprisonment.

10 No order was made by the Court of Criminal Appeal with respect to the sentence of 18 months' imprisonment imposed on Mr Jones for money laundering. The Court of Criminal Appeal expressed 2 the view that the facts alleged to found the money laundering offence were all facts necessary to establish the other offences with which Mr Jones was charged, and that 3 to charge the money laundering offence raised ‘serious issues relating to double jeopardy’. The correctness of that view was not in issue in this Court and had not been in issue in the Court of Criminal Appeal. It would be wrong to express any view about it in these reasons. What is presently relevant is that, on one view of the matter, the fact that the Court of Criminal Appeal made no order with respect to the sentence imposed for money laundering left intact the recognizance release order made at first instance in respect of that sentence.

Applications to this Court

11 The applicants seek special leave to appeal against the sentences imposed by the Court of Criminal Appeal. That application was referred for argument, as on appeal, before the whole Court.

12 The applicants sought to argue three questions. First, is there, or should there be, ‘a norm or starting point, expressed as a percentage’ for the period of imprisonment that a federal offender should actually serve in prison before release on a recognizance release order? Second, did the Court of Criminal Appeal give adequate reasons for its conclusion that the sentences imposed at first instance were manifestly inadequate? Third, did the orders made by the Court of Criminal Appeal leave intact the recognizance release order made at first instance in respect of the sentence imposed on Mr Jones for money...