Effect of proceeds of crime orders on sentence

The Western Australian Court of Appeal has delivered an important judgment which considers the proper approach to sentencing an offender where confiscation of proceeds of crime has occurred. It was a Crown appeal against sentence, The Queen v Host [2015] WASCA 23.

By way of background, many confiscation/proceeds of crime regimes place statutory restrictions on the ability of a sentencing court to take into account the fact of a proceeds of crime order. In WA see s 8 of the Sentencing Act 1995 which severely limits the ability of a Court to take account of an order made under the Criminal Property Confiscation Act 2000.

The Court in The Queen v Host was concerned with the Commonwealth Proceeds of Crime Act 2002, section 320 of which provides:

320 Effect of the confiscation scheme on sentencing
A court passing sentence on a person in respect of the person’s conviction of an *indictable offence:
(a) may have regard to any cooperation by the person in resolving any action taken against the person under this Act; and
(b) must not have regard to any *forfeiture order that relates to the offence, to the extent that the order forfeits *proceeds of the offence; and
(c) must have regard to the forfeiture order to the extent that the order forfeits any other property; and
(d) must not have regard to any *pecuniary penalty order, or any *literary proceeds order, that relates to the offence.

As an appellate level decision on a Commonwealth law, it is binding in all states. ((See generally ASC v Marlborough Gold Mines Limited (1993) 177 CLR 485.)) There had previously been a lack of authority on the proper application of the section.

The bench, McLure P, Buss and Mazza JJA each expressed themselves differently on the proper approach to be taken to s 320, and its interaction with the general sentencing provisions contained in s 16A of the Crimes Act 1914 (Cth). Discerning the true authority of the case is not straightforward.

Overview

The Judgment of Buss JA contains the facts, background and grounds of appeal. ((See [36] and following.)) Put succinctly:

• Mr Host had been convicted on his late plea of tax fraud.
• He received what the Court held was a lenient, and in fact manifestly inadequate, sentence.
• At about the time he was charged with those offences, real property owned by him was restrained by the Australian Federal Police under the Proceeds of Crime Act 2002.
• Shortly prior to his sentence he signed a consent Pecuniary Penalty Order under ss 116 and 316 of the Proceeds of Crime Act 2002 ((See [90].)).
• He made immediate payment of the Pecuniary Penalty Order, in part utilising funds he had borrowed from family members. ((See [91].))

President McLure was in agreement with Buss JA about the disposition of the appeal, and in general terms his Honour’s reasons. However the President differed from Buss JA on the construction issue concerning the relationship between s 320 of the Proceeds of Crime Act 2002 and s 16A of the Crimes Act 1914. ((See [1].))

Justice Mazza delivered his own short reasons concerning s 320. ((He was otherwise in agreement with Buss JA.)) He expressed his agreement with McLure P that s 320(a) of the Proceeds of Crime Act 2002 “should be construed widely.” ((At [193].)) His Honour also agreed with a number of aspects of McLure P’s reasoning. ((At [193] to [196].))

President McLure

I suggest the judgment of McLure P contains the ratio of the decision. Her Honour:

• Considered the legislative history ((At [11] and following.)) including an important ALRC report, Confiscation that Counts.
• Held that the expression “must not have regard to” in s 320(d) is intended to make the pecuniary penalty order an irrelevant sentencing consideration. ((At [17].))
• Held that (mere) “payment pursuant to a pecuniary penalty order is an irrelevant sentencing consideration.” ((At [18].))
• Said that “[S]ection 320(a) should be widely construed to include, inter alia, any unusual or voluntary steps taken to cooperate in the enforcement of the pecuniary payment order, such as by obtaining loans or otherwise. Further, the matters in s 320(a) are relevant mitigatory factors even if they do not evidence contrition. Like the mitigatory effect of a plea of guilty and cooperation generally, the matters in s 320(a) may, but not must, evidence remorse.” ((At [20].))
• Held that any inconsistency between s 16A of the Crimes Act and s 320 must be resolved in favour of s 320, it being enacted later in time and being more specific. ((At [20].))

Justice Mazza

Justice Mazza held:

“Beyond saying that s 320(a) PCA should be construed widely, it is unnecessary and undesirable to attempt to exhaustively define what actions may constitute cooperation for the purposes of the subsection. However, it may be accepted that, generally speaking, consenting to an order may constitute cooperation, particularly when done earlier rather than later. Steps taken to aid the enforcement of an order may also constitute cooperation.” (emphasis added)

At [193]

The sentence emphasised above seems at one with the earlier quoted passage from the President at [20].

Justice Mazza went on:

“In my opinion, s 320(d) should be construed to include as an irrelevant consideration payments made pursuant to a pecuniary penalty order.” ((At [196].))

His Honour also agreed with McLure P that s 16A Crimes Act 1914 must be read down to give effect to s 320.

Justice Buss

For completeness, Justice Buss said:

“[B]y s 320(d), a court passing sentence must not have regard to any amounts paid or payable under a pecuniary penalty order, including any amounts paid or payable by the offender pursuant to
the order and any amounts recovered or recoverable by the Commonwealth upon the enforcement of the order.”

At [103]

“If relevant and known to the court, a sentencing judge must take into account, as a mitigating factor, the degree to which the offender has shown contrition for the offence, including contrition which the offender has shown by taking action to make reparation for any injury, loss or damage resulting from the offence, provided that the reparation in question did not or will not involve payment or restitution pursuant to a pecuniary penalty order of some or all of the benefits (including any services or advantages) derived by the offender from the commission of the offence.” (emphasis added)

At [115]

His Honour does not allow for the breadth of scope in s 320(a) that McLure P and Mazza JA endorse. Although he does not express it in these terms, arguably his Honour’s judgment has the effect of elevating the importance of s 320(d) above s 320(a).

Sentencing strategy

An offender awaiting sentence (and who believes s/he may be assisted by s 320) can apply under s 321 to defer sentencing until after determination of the proceeds of crime proceedings.