Supreme Court New South Wales

• Medium Neutral Citation: R v SAKOVITS; R v SAKOVITS [2013] NSWSC 464
• Hearing dates: 28 March 2013
• Decision date: 26 April 2013
• Jurisdiction: Common Law - Criminal
• Before: Hall J

Decision

Jane Maria Sakovits

(1) In respect of Count 1 on the indictment, sentenced to imprisonment for a period of 6 months commencing 26 April 2013 and expiring on 25 October 2013.

(2) In respect of the Count 2 on the indictment sentenced to imprisonment for a period of 5 years commencing on 26 April 2013 and expiring on 25 April 2018.

The sentence imposed with respect to Count 1 is to operate concurrently with the sentence imposed in respect of Count 2.

In respect of the sentence on Count 2 on the expiration of 2 years and 6 months, namely 25 October 2015, order that Jane Maria Sakovits be released upon giving security in the amount of $200, without surety by recognisance, to the satisfaction of the Court, and that she complies with the conditions specified in s 20(1)(a) of the Crimes Act 1914.

Ronald Rudolph Sakovits

(1) In respect of Count 1 on the indictment, sentenced to imprisonment for a period of 6 months commencing 26 April 2013 and expiring on 25 October 2013.

(2) In respect of Count 2 on the indictment sentenced to imprisonment for 5 years commencing on 26 April 2013 and expiring on 25 April 2018.

The sentence imposed with respect to Court 1 is to operate concurrently with the sentence imposed in respect of Count 2.

On the expiration of a period of 2 years and 6 months, namely 25 October 2015, order that Ronald Rudolph Sakovits be released upon giving security in the amount of $200, without surety, by recognisance to the satisfaction of the Court, that he complies with the conditions specified in s 20(1)(a) of the Crimes Act 1914.

• Catchwords: CRIMINAL LAW - sentencing - guilty verdict by jury - dishonesty offences - s 29D and s 86 Crimes Act 1914 (Cth) - s 135.4(3) of Criminal Code Act 1995 (Cth) - conspire to defraud the Commonwealth - tax avoidance scheme -- nature and seriousness of offences - personal circumstances - hardship faced by offender's mother's circumstances did not constitute "exceptional circumstances" - tax scheme proposed by offenders' accountant but unlawful conduct continued - significance of delay - evidence of good character - Importance of general deterrance - where convicted of two charges but involved single conspiracy - other comparable offenders - sentence imposed - recognisance release order
• Legislation Cited: Crimes Act 1914 (Cth); Criminal Code 1995
• Cases Cited: Agius v R [2011] NSWCCA 119; Cheung v R [2001] HCA 67; 209 CLR 1; Hilli v R; Jones v R [2010] HCA 45; R v Agius [2012] NSWSC 978; R v Boughen; R v Cameron [2012] NSWCCA 17; R v Bragias (1997) 92 A Crim R 330; R v Gallagher (1991) 53 A Crim R 248; R v Gregory [2011] VSCA 145; R v Hart [1999] NSWCCA 204; R v Hinton [2002] NSWCCA 405; 134 A Crim R 286; R v O'Connor [2002] NSWCCA 156; R v Olbrich [1999] HCA 54; 199 CLR 270; R v Pang (1999) 105 A Crim R 474; R v Pearce [1998] HCA 57; 194 CLR 610; R v Rivkin (2004) 184 FLR 364; R v Togias [2001] NSWCCA 522
• Category: Sentence
• Parties: Regina (Crown); Jane Maria Sakovits (Offender); Ronald Rudolph Sakovits (Offender)
• Representation: Counsel: S McNaughton SC; S Callan (Crown); D Fagan SC (Offenders); Solicitors: Commonwealth Director of Public Prosecutions (Crown); L Thomas (Offenders)
• File Number(s): 2009/249946; 2009/252021

Judgment

1 HALL J: On 21 February 2013 following a trial by jury, Jane Maria Sakovits and Ronald Rudolph Sakovits were each found guilty of the following offences.

(1) That the offenders between 1 April 2001 and about 23 May 2001 at Sydney, New South Wales, did conspire with each other to defraud the Commonwealth

contrary to sections 29D and 86(1) of the Crimes Act 1914 (Cth) and

(2) That the offenders between 24 May 2001 and 30 September 2006 at Sydney, New South Wales, did conspire with each party with the intention of dishonestly causing a loss to a third person, namely the Commonwealth

contrary to section 135.4(3) of the Criminal Code.

2 The offenders were charged with two offences by reason of a change in the Commonwealth criminal legislation effected on 24 May 2001. For a more detailed explanation see Agius v R [2011] NSWCCA 119. The Crown, however, submitted that, notwithstanding that there were offences under different statutory regimes, there was one single conspiracy spanning the period of both charges brought against each of them.

3 The maximum penalty for an offence under to s 29D and 86(1) of the Crimes Act 1914 (Cth), is a fine not exceeding 2000 penalty units, or imprisonment for a period not exceeding 20 years, or both.

4 The maximum penalty for an offence contrary to s 134.5(3) of the Criminal Code is 10 years imprisonment and/or a fine of $66,000.

5 The Crown has submitted that, for the purposes of sentencing, the maximum penalty should be regarded as 10 years in respect of count 1: R v Boughen; R v Cameron [2012] NSWCCA 17 at [3].

6 In determining the sentences in the case of each offender, I am required to make findings for the purpose of determining the sentences to be imposed. In determining the facts my determination must be consistent with the verdicts of the jury and findings of fact that I make against each offender must be arrived at beyond reasonable doubt: Cheung v R [2001] HCA 67; 209 CLR 1 at 12-13, [13]-[14].

7 A sentencing court may not take facts into account on sentence in a way that is adverse to the interests of either offender unless those facts have been established beyond reasonable doubt. On the other hand if there are matters which one or other or both of the offenders rely upon in mitigation of penalty, it is sufficient if those matters are proved by the offender or offenders on the balance of probabilities: R v Olbrich [1999] HCA 54; 199 CLR 270 at 281 [27]-[28].

8 At trial in the present proceedings a significant volume of documentary material was admitted into evidence. The trial was conducted by the Crown and by the offenders through Senior Counsel in a co-operative and most efficient manner.

9 Sentencing in respect of Commonwealth offences is governed by the provisions of Part 1B of the Crimes Act. That Part includes the provisions of s 16A of the Act which specifies what might be described as a "check list" of matters that are to be taken into account in the sentencing of a federal offender.

10 The application of the provisions of Part 1B of the Crimes Act must ensure that the necessary deterrent or punitive effects of sentences for serious tax evasion is reflected both in the head sentence and also in any provision for earlier release from custody.

11 There are many and varied factors relevant to the relative weight to be afforded to each factor in the overall sentencing process and the weight will vary according to the case. Relevant factors will often point in different directions. Those factors are of particular relevance in relation to the determination of the proportion that the pre-release period bears to the sentence of imprisonment to be imposed. That proportion, however, is to be determined in accordance with proper sentencing principles as applied to the circumstances of each individual case: Hilli v R; Jones v R [2010] HCA 45 at [42]-[43].

12 As the Crown has submitted, the governing principle under s 16A(1) is the imposition of a sentence which is of a severity appropriate in all the circumstances. Section 16A(2) requires that I take into account the matters that are identified in that section that are relevant and known to the Court. In accordance with relevant principles, the sentence to be imposed in relation to each offender must be such as to ensure that they are adequately punished and the penalty is not out of touch with the circumstances of the case such as to constitute an affront to the community: R v Gallagher (1991) 53 A Crim R 248; R v Pang (1999) 105 A Crim R 474.

13 Section 16A(2) contains a catalogue of matters which I am obliged to take into account. Those of particular relevance in the present proceedings include:

Section 16A(2)

(a) the nature and circumstances of the offences;

(c) Any course of criminal conduct of which the offences are part;

(e) Any injury, loss and damage resulting from the offences;

(f) The degree (if any) to which the offenders have shown contrition for the offences;

(j) The deterrent effect that any sentences I am considering may have on the offenders;

(k) The need to ensure that they are adequately punished for the offences;

(m) The character, antecedents, age, means and physical or mental condition of the offender;

(n) The offender's prospects of rehabilitation.

(p) The probable effect that any sentence under consideration would have on the offender's families or dependants.

14 Section 16A(2)(h), requires consideration of "the degree to which (the offenders) have co-operated with law enforcement authorities in the investigation of the ... offences". In the present case, the offenders participated in lengthy interviews in the course of investigations. There is no other aspect of co-operation other than the way in which the evidence was adduced at trial which, as I have earlier indicated, proceeded in a very efficient manner which both assisted the presentation of the Crown case, and assisted the jury in determining the matters requiring its determination.

15 There is no particular evidence of any contrition for the offences.

16 Section 17A directs me not to pass a sentence of imprisonment on an offender convicted of a Commonwealth offence unless, having considered all other available sentences, I am satisfied that no other sentence is appropriate in all the circumstances of the case.

17 The first matter for consideration concerns the nature and circumstances of the offences. In that regard, I return to the relevant facts.

Facts

18 During the period of the offending, both offenders were directors of a company, Inform Promotions ("Inform"). Mr Ronald Sakovits was secretary of that company until 30 June 2006, on which date Mrs Sakovits was appointed secretary of the company.

19 Either or both of Mr and Mrs Sakovits authorised the lodgement of the company tax returns for Inform for the financial years ended 30 June 2000 to 30 June 2006.

20 Their involvement in what has been characterised as a tax avoidance scheme during which the offences by them were committed occurred in circumstances in which their accountant, Lynette Liles, introduced them to a scheme which led to them participating in an offshore "round robin" arrangement involving a Vanuatu company, International Prestige Promotions ("IPPI"). The arrangement enabled the offenders to evade payment of both company and personal income tax.

21 The company, IPPI, was incorporated by the offenders in Vanuatu at the suggestion and with the assistance of Ms Liles. The company income tax frauds were achieved through the transfer of monies from Australia to Vanuatu disguised as legitimate payments by Inform for the cost of services such as 'marketing and promotions' provided by IPPI.

22 The offenders created or were party to the creation of false invoices purportedly raised by IPPI to give the appearance of the payments being for legitimate business expenses. The offenders and Liles falsely recorded the payments from Inform to IPPI in Inform's accounts as business expenses. Such false expenses in turn flowed through to the relevant company income tax returns, thereby reducing the company's taxable income declared to the Australian Taxation Office (ATO) and the overall amount of company tax paid. Due to the ATO's system of self-assessment, the tax returns were processed automatically, resulting in assessments being issued based on the tax returns depriving the ATO of the correct amount of tax.

23 The offenders' participation in the arrangement caused a loss to the taxation revenue in the following respects:

(1) unpaid company tax on income fraudulently reduced by claims for the deduction from assessable income of fictitious business expenses; and

(2) unpaid personal tax through the fraudulent failure to declare as assessable income the monies received by the scheme participants in consequence of the international round robins (the receipts being dividends and hence part of their assessable incomes).

24 The company tax shortfall resulting from the false claims for Inform over the years 2000-2006 was $530,789.

25 The amounts falsely claimed as 'marketing and promotion' and other expenses in respect of the individual financial years may be summarised as follows:

(i) The financial year ended 30 June 2000, total expenses claimed amounted to $216,727, resulting in a tax shortfall of approximately $101,862.

(ii) In respect of the financial year ended 30 June 2001, total expenses falsely claimed was $231,538, resulting in a tax shortfall of approximately $46,313.

(iii) In respect of the financial year ended 30 June 2002, expenses falsely claimed was $181,766, together with 'agency fees' of $16,000 resulting in a tax shortfall of approximately $59,302.

(iv) In respect of the financial year ended 30 June 2003, expenses incorrectly claimed was $208,938.18, and 'agency fees' of $89,624 resulting in a tax shortfall of approximately $89,569.

(v) In respect of the financial year ended 30 June 2004, two groups of expenses were falsely claimed, the first amounted to $216,783.50, and the second, $257,534.80 resulting in a tax shortfall of approximately $112,475.

(vi) In respect of the financial year ended 30 June 2005, expenses falsely amounted to claim $268,582, and a further $94,384 resulting in a tax shortfall of approximately $89,448.

(vii) In respect of the financial year ended 30 June 2006, expenses falsely claimed as 'rent' was $109,150, and 'agency fees' of $106,071 resulting in a tax shortfall of approximately $31,821.

26 The personal income tax shortfall resulting from Jane Sakovits' failure to declare her true assessable income for the seven financial years in question was $326,432.

27 The personal income tax shortfall resulting from Ronald Sakovits' failure to declare his true assessable income for the seven financial years in question was approximately $320,672.

28 The total company and personal income tax shortfall is approximately $1,177,893.

Particular Matters Relevant to Culpability Issues

29 It has long been accepted that general deterrence is an important consideration in relation to taxation fraud, offences of that kind being difficult to detect, investigate and prosecute successfully.

30 The Crown in its submissions on sentence referred to the well-established proposition that fraud on the Commonwealth revenue, absent exceptional circumstances, must attract the imposition of a full-time custodial sentence. The principles relating to offences involving revenue fraud are well established.

31 In the ultimate determination of sentence in respect of offences involving revenue fraud, consideration must be given to the following:

(i) The objective gravity of the offence,

(ii) The maximum sentence fixed by the legislature which defines the limit of the sentence for cases in the most serious category. I earlier referred to the maximum of ten years.

(iii) the importance of general deterrence, a matter that has been described as a predominant consideration in sentencing for offences of defrauding the revenue: R v O'Connor [2002] NSWCCA 156; See also R v Gregory [2011] VSCA 145 at [53]-[54].

32 In determining the objective seriousness of the offending the following factual matters are to be considered and are taken into account:

(i) The tax evasion arrangement involved a sophisticated degree of planning and premeditation.

(ii) The amount of money defrauded was substantial.

(iii) The fact of a multiplicity of dishonest acts involved.

(iv) The period of time over which the offending took place (in the present case five years and five months approximately).

(v) The issue of motivation which, in these proceedings the Crown submitted was established by the evidence to have been self-interest.

33 The evidence, in my opinion, establishes beyond reasonable doubt the presence of each of those matters in relation to the conduct giving rise to the subject offences.

34 The terms of the method by which Mr and Mrs Sakovits transferred money from Inform to IPPI's bank account and then to distribute the funds in the account, were said to be not particularly complicated, as the Crown observed. However, by using the tax haven of Vanuatu as the place for IPPI's incorporation, as the Crown also observed, they were able to conceal their involvement in IPPI. The use of nominee directors and shareholders and the establishment of confidentiality agreements all meant that the offenders employed a degree of sophistication to conceal their involvement and which greatly reduced the possibility that the tax evasion would be discovered. The Crown further submitted, and I accept, that the difficulty and the cost of detection, given the efforts of the offenders to conceal the offending conduct by the use of false supporting documentation, is also a relevant factor in determining the sentences to be imposed.

35 The Crown noted that the arrangement entered into by the offenders meant that they actively participated in 26 international transactions whereby they forwarded monies from Inform's bank account to the entity that controlled the IPPI account, namely Moores Rowland. The monies that were sent overseas were intended to give the appearance of the payment of legitimate business expenses that were claimed in the tax returns.

36 Particular acts involved in the offending included both the transmission of funds and the obtaining of documents to conceal the offences from the authorities and their authorisation for the lodgement of both company tax returns in the relevant years and personal income tax returns.

37 The Crown further submitted, and I accept, that the offenders' conduct involved a breach of the community's trust in circumstances where the tax system is based upon self-assessment which in turn depends upon the honesty and integrity of those who use it.

38 The offending conduct took place over the period of five years and five months (between 1 April 2001 and 30 September 2006) indicating that the culpability involved was considerable in that it involved lengthy, persistent and calculated fraud.

39 In terms of s 16A(2)(c) - namely whether the conduct forms part of a course of conduct consisting of a series of criminal acts, it is clear that the course of conduct in relation to the subject offences was of that character. That is a matter to be taken into account, not as an aggravating factor that increases the sentence to be imposed, but as indicating that the conduct was not an isolated incident.

40 Plainly the amount of the loss or damage resulting from the offences in terms of s 16A(2)(e) is an important factor in determining the sentences in the present proceedings. In that respect, the total amount of tax evaded amounted, as I have earlier indicated, to approximately $1,177,893. That amount, however, I note is substantially less than the total amount of tax evaded in the cases considered by the Court of Criminal Appeal in R v Boughen; R v Cameron, supra, which involved a total amount of $1,755,000 (a difference of approximately $577,000). I will return to the objective seriousness in those particular cases, that is in Boughen; Cameron, compared to the present case shortly.

41 The sentences to be imposed are intended to reaffirm basic community values that all citizens according to their means should fairly share the burden of incidence of taxation so as to enable Government to provide for the community: R v Gregory, supra, at [57].

42 I am required to have regard to the character, antecedents, age, means and physical or mental condition of the person to be sentenced. In the present proceedings, Mrs Sakovits is 62 years of age and Mr Sakovits is 64. Both have been business people having owned and operated their own businesses.

43 Neither offender has a criminal record or a record of any other form of offending and, in particular, no record of taxation offences.

44 Whilst the absence of any criminal antecedents is a factor to be taken into account, it has been accepted that less weight is to be given to good character where the offending has involved systematic defrauding of the revenue: R v Rivkin (2004) 184 FLR 364 at [410].

Submissions for the Offenders

45 Mr Fagan SC on behalf of Mr and Mrs Sakovits stated that he could not challenge the characterisation of the offences as determined by the jury, as set out in the Crown's submissions and stated that, in light of the decisions of the High Court in R v Jones and R v Hilli, supra, and of the Court of Criminal Appeal in R v Boughen; R v Cameron, supra, his submissions were directed to seeking lenience with respect to the non-parole period: (T 28 March 2013 at p 9).

46 Mr and Mrs Sakovits did not give evidence in the sentence proceedings. In those circumstances, relevant matters concerning their personal circumstances have been established, in part, by evidence given at trial and also the tender, at the sentencing hearing, of documentary evidence including in particular, medical reports and testimonials.

47 Mr Fagan stated that the subjective factors of most importance were:

The age of the offenders.

The hardship to them in serving any full-time period in custody at their stage in life.

Their own ill health which will exacerbate and make more difficult the period of time in custody.

48 On the issue of hardship in respect of time spent under a term of imprisonment, Mr Fagan submitted that the hardship would be exacerbated having regard in particular to the age and medical condition of Mrs Sakovits' mother who will be denied the offender's care of her thereby increasing the anguish, through being denied the ability to be with her mother. A further matter to which reference was made was the submission at T 10 as to family deprivation in terms of access and participation in the continuation of their family.

49 I have had regard to the medical reports of Dr Lachlan Soper, general practitioner, and will refer to them in a moment. The reports are dated 25 February 2013 and 19 March 2013 concerning Mr Sakovits and Mrs Sakovits respectively. They were tendered in evidence (Exhibits 1 and 2). They establish that both of them have received treatment, amongst other things, for significant stress and anxiety arising out of the investigation and charges that have culminated in their conviction. Dr Soper expressed the opinion that the stress may have contributed to a heart attack Mr Sakovits sustained on 18 April 2010 for which he was later stented in November 2010. The report otherwise provides details of Mr Sakovits' peripheral neuropathy and other conditions for which he is on medication, including medication for hypertension and other conditions that are detailed in the report.

50 Dr Soper in his report in relation to Mrs Sakovits has set out in considerable detail her medical history and in particular her referral to a psychologist and treatment on antidepressant medication. He stated that many of his attendances upon her have focussed on anxiety and stress related conditions. Although her medication Efexor XR dose was doubled, attempts to reduce it have been unsuccessful. His report also refers to her diabetic condition, and other medical matters which need not here be detailed, which have required medical care and treatment.

51 It is apparent that both offenders will require ongoing medical attendances and supervision and monitoring in relation to a number of medical issues and the prescription of required medications.

52 It is accepted that an offender's psychological and medical health and age may increase the hardship of a sentence and may therefore be taken into account in deciding what sentence is appropriate, but that consideration is limited by the necessity of maintaining proper standards of punishment: R v Hart [1999] NSWCCA 204 per Sperling J at [8].

53 Whilst a sentencing judge is entitled, in arriving at the appropriate penalty, to take into account an offender's age, health, generally speaking, those factors of themselves do not mean that a term of imprisonment should not be imposed if it is otherwise warranted. They are factors that may, instead, affect the length of a custodial sentence. In the present proceedings, I consider that the evidence as to the age and states of health of each of Mr and Mrs Sakovits are matters that must be taken into account in the sentence determinations in accordance with the provisions of s 16A(2)(m).

54 A further matter relied upon in mitigation of penalty was the circumstance that the offenders were induced into the tax evasion arrangement by their accountant who was described as "an influential accountant". In this latter respect, reference was made to the sentencing remarks concerning Liles, in particular the information available from those remarks and from other cases which indicated that Liles had drafted numerous clients into the tax evasion schemes promoted by her. I have read the sentencing remarks concerning Liles.

55 These circumstances were said to place the offenders' participation in a correct light. Mr Fagan submitted that, on the basis of the material available the offenders were people who would not have ever considered initiating such a tax evasion scheme as was promoted by Liles and that they were in effect inducted into it. The sentence imposed upon Liles was said to give recognition of her "initiating role with relation to many of these people", as Mr Fagan put it: (T 28 March 2013, at p 10).

56 The fact that a professional accountant like Liles proposed the tax evasion scheme is both an appalling fact and one that sheds some light upon the circumstances that led to the present case. However, this is a circumstance which Simpson J considered. Her Honour wrote the lead judgment in R v Boughen; R v Cameron, supra:

57 In R v Boughen; R v Cameron a submission was made that weight should be given to the fact that the respondents had been inveigled or lured into the scheme. Simpson J however observed:

"[95] ... Had the fraudulent conduct ceased on, or soon after, the respondents' realisation of its true character, this circumstance may have had some weight. Given that the conduct continued for another seven years after that realisation, its significance is diminished to almost nothing."

58 Whilst there are relevant difference in those cases, given the jury's verdict in the present cases, a similar view must, in my view, be taken.

Delay

59 A further matter relied upon in Mr Fagan's submissions was the question of delay. In this respect, he described Mr and Mrs Sakovits as having been "in limbo" with respect to the subject of these proceedings for a long time. In May 2005, officers of the Australian Taxation Office first came to their premises and re-attended again in June 2006, and then in December 2007, police executed search warrants. A year later (2008), they were asked to take part in a Record of Interview, which they did. In early 2009, it was said they were charged with the subject offences. The submission was that they had accordingly been under "the pressure and the uncertainty and the apprehension of these proceedings and their outcome for many many years": (T 28 March 2013 at p 10-11). It was said in all to have been a period of 8 years from the first visit by officers from the Australian Taxation Office.

60 Mr Fagan made it clear that he did not suggest fault on behalf of the authorities in relation to the delay and that, apart from the offenders wishing to defend themselves and put forward their case, they had not otherwise exacerbated the delay. The period of uncertainty with which they have lived, it was submitted, must have caused extreme anguish and one from which, particularly in the light of the medical evidence, it could be inferred did place great stress upon each of them. I have indicated earlier that I accept the substance of that submission.

61 The delay in this case was substantial and it is clear on the evidence that it has severely impacted upon Mr and Mrs Sakovits. I consider that the proper administration of justice in this case requires that I take that matter into account. It is a matter I have taken into account in determining the appropriate length of the custodial period in respect of the sentences to be imposed.

Personal Circumstances

62 I turn to another personal circumstance which concerns the poor health of Mrs Sakovits' mother. The evidence called at the sentence hearing established that Mrs Sakovits' mother is elderly and in a very ill condition. Section 16A(2)(p) of the Crimes Act, entitles and requires that I am to bring into account family consequences subject to one condition. The circumstances may not be given substantial weight in the sentencing determination unless they can be characterised as "exceptional": R v Togias [2001] NSWCCA 522 at [9]-[17]; R v Hinton [2002] NSWCCA 405; 134 A Crim R 286 at [31]; R v Agius [2012] NSWSC 978 at [87]. It appears likely that Mrs Sakovits' mother will not return home and will be admitted to an appropriate care institution. Whilst the impact, in particular, upon Mrs Sakovits of her mother's condition is understandably a matter of great and serious concern, on the construction which the relevant case law authorities have placed upon the provisions of s 16A(2)(p), the evidence does not enable me to make a finding that the circumstances can be characterised as "exceptional" for the purposes of applying that provision.

63 Mr Fagan SC on behalf of Mr and Mrs Sakovits, referred to one factual consideration which was not the subject of evidence but which he put on instructions and which Mr Fagan submitted flows from the figures that had been given for the amount of tax, namely, the financial impact upon them. Having regard to their liabilities and that of the company to the Australian Taxation Office, being both primary tax and shortfall penalty taxes, Mr Fagan stated on instructions that they have been ruined by such liabilities.

64 It was also noted in submissions that the business previously operated by Mrs Sakovits cannot be sustained if she is imprisoned for a substantial period. That would mean that, at her age, her livelihood through self-employment has been lost and that this constitutes a significant penalty on both Mr and Mrs Sakovits.

65 On this latter aspect, the Crown, however, noted that financial hardship to an offender because of imprisonment is not a relevant consideration: R v Bragias (1997) 92 A Crim R 330 at 333. The Crown submission in this regard must, in my view, be accepted.

66 There was tendered in evidence, seven testimonials from persons who have known the offenders for very lengthy periods of time. There is a common theme amongst them. It is that Mr and Mrs Sakovits have been hardworking people of good character with strong family values and who have supported friends in times of hardship. They have also acted, throughout, in recent years at least, as the primary carers to Mrs Sakovits' mother. It is clear from the evidence that they were each persons of prior good character and of unblemished reputation. It is also clear that they have, as I indicated, strong family support and the continued respect and support of many members of the community. These are favourable matters so far as their future is concerned.

67 A number of those providing testimonials have referred to the evident impact that the stress upon them over the years as a result of the investigation and the proceedings that have led to their conviction.

68 I take all those matters into account in determining sentence in accordance with established principle. That said, as it has been observed, however painful it may be for sentencing judges, they are required to consider and appropriately balance all matters required to be taken into account by statute and in accordance with principle without losing sight of the importance in a particular case of the need to give effect to the principle of general deterrence. This has repeatedly been emphasised by appellate authority: R v Boughen; R v Cameron at [96]; R v Hili; R v Jones at [63].

Sentencing Decisions

69 Sentences imposed in other cases involving serious tax evasion have been referred to in the submissions for the Crown and on behalf of the offenders. They stand as a yardstick against which to examine the proposed sentences, an exercise I have undertaken. However, sentences in such cases do not establish the upper and lower limits of any range of sentences as necessarily being the correct limits in the individual case. It is necessary to examine the circumstances of such comparator cases and by doing so to identify the unifying principles that guide or account for sentences imposed in individual cases.

70 I turn to the judgment of the Court of Appeal in R v Boughen; R v Cameron, supra, to which I earlier referred and which has been referred to in the submissions on behalf of the Crown and the offenders. Whilst I am conscious of the limitation on the use of historical sentencing data, I consider it appropriate to refer briefly to the facts and circumstances of that case, and the sentences imposed upon the respondents in those proceedings.

71 Both the offenders Boughen and Cameron each pleaded guilty to two counts. The first count was of conspiracy to defraud the Commonwealth between 1 July 1997 and 23 May 2001, contrary to the provisions of the Crimes Act 1914 (ss 29D and 86).

72 The second count was a charge of conspiracy to dishonestly cause a loss to the Commonwealth (Criminal Code 1995, s 135.4(3)), between 24 May 2001 and 31 July 2004.

73 Notwithstanding their initial naivety, by 1997, both respondents in those cases were well aware of the fraudulent nature of the arrangement in which they were involved. Over a period of time, Boughen evaded income tax of $520,000, Cameron evaded income tax of $506,000 and their company, Concept, evaded income tax of $727,000.

74 The offending conduct by each of the respondents in that case was objectively more serious than the present cases insofar as:

(a) In R v Boughen; R v Cameron the offending took place over a period of seven years, in contrast to the present cases where the offending took place over a period of five years and five months.

(b) The total of personal and company tax avoided was greater than in the present cases ($1,755,000 as against $1,077,893), a difference of tax avoided in the present case, as I have earlier noted, of $577,107.

75 In addition, the period of delay between the execution of search warrants and the sentence hearing in R v Boughen; R v Cameron was three years. In the present case the delay between the execution of search warrants and the present sentence hearing has been five years and four months.

76 In R v Boughen; R v Cameron the offenders entered guilty pleas for which they were entitled to a discount on sentence together with a discount for assistance. On re-sentencing by the Court of Criminal Appeal, allowing for their pleas of guilty, Cameron was sentenced to a three-year period of imprisonment to be released after 18 months on recognisance without surety to be of good behaviour for a period of 18 months.

77 The sentence imposed upon the offender Boughen was also a term of imprisonment of 3 years, with 18 months on recognisance to be of good behaviour for a period of 18 months.

78 The sentences in both those cases was arrived at after allowance for sentencing discounts. The sentences were derived from a starting point of 6 years: R v Boughen; R v Cameron at [105].

79 The appropriate total sentences, allowing for the reduction of a 40% discount, was considered to be 3 years and 7 months: at [127]. By reason of the respondents having served compliance with the terms of the Intensive Correction Orders imposed by the original sentencing judge and further delay in finalisation, Simpson J with whom the other two judges agreed, reduced the sentence to 3 years. That result was arrived at, as noted, after allowance for the 40% combined discount for guilty pleas and assistance. In considering the sentences imposed in that case, as providing guidance in the present case, the fact of the permitted sentencing discount is an important one to be taken into account.

80 In determining sentence it is necessary to have regard to the fact that each offender has been convicted on two charges. That, as I earlier explained, was solely due to the structuring and restructuring of the Commonwealth criminal legislation. It is clear that the offenders were guilty of a single conspiracy that continued over the whole of the charge period. In accordance with ordinary sentencing principles that would indicate that a single sentence ought to be imposed.

81 However, in the present cases concerning Mr and Mrs Sakovits, the existence of two counts, in respect of each of which an appropriate sentence must be passed in relation to each count precludes that course. Individual sentences must be imposed, appropriate to the criminality involved in each offence: R v Pearce [1998] HCA 57; 194 CLR 610 at 624. Questions of accumulation and concurrence of sentences are then to be considered. The position that arises in the present cases also arose in R v Boughen; R v Cameron, supra, and was discussed by Simpson J at [125]-[126] of the judgment of the Court of Criminal Appeal. Her Honour there observed that although the application of the principle in Pearce was somewhat artificial in sentencing the respondents, it was a requirement that had to be complied with. Her Honour observed that the offending in that case in relation to each count was of approximately equal duration and proceeded to impose terms of imprisonment of equal duration in respect of each charge in those circumstances.

82 Count 1 in this case, as earlier noted, covers only a brief period (1 April 2001 to 23 May 2001) whereas Count 2 covers the period 24 May 2001 and 30 September 2006.

83 I have concluded that as in R v Boughen; R v Cameron, I am required to impose separate sentences. I propose to make the sentence on Count 1 wholly concurrent with the sentence to be imposed with respect to Count 2 in accordance with the submissions made by Mr Fagan.

Sentences

JANE MARIA SAKOVITS

84 For the purposes of s 17A(1) of the Crimes Act, having considered all sentencing options, I am satisfied that, and indeed bound, that in all the circumstances of the case, no sentence other than imprisonment is appropriate. That is because the offending involved deliberate and systematic and repeated acts to defraud the revenue.

85 I propose to fix sentences relevant to each offence and make the sentences concurrent. In respect of the offence the subject of Count 1 on the indictment I will impose a sentence of 6 months. In respect of Count 2 on the indictment I will impose a sentence of 5 years with a recognisance release order after the offender has served a period of 2 years and 6 months.

Jane Maria Sakovits

(1) In respect of Count 1 on the indictment, I sentence you to imprisonment for a period of 6 months commencing 26 April 2013 and expiring on 25 October 2013.

(2) In respect of the Count 2 on the indictment I sentence you to imprisonment for a period of 5 years commencing on 26 April 2013 and expiring on 25 April 2018.

The sentence imposed with respect to Count 1 is to operate concurrently with the sentence imposed in respect of Count 2.

In respect of the sentence on Count 2 on the expiration of 2 years and 6 months, namely 25 October 2015, I order you be released upon giving security in the amount of $200, without surety by recognisance, to the satisfaction of the Court, and that you comply with the conditions specified in s 20(1)(a) of the Crimes Act 1914.

RONALD RUDOLPH SAKOVITS

86 For the purposes of s 17A(1) of the Crimes Act, having considered all sentencing options, I am satisfied that, in all the circumstances of the case, no sentence other than imprisonment is appropriate. That is by reason of the deliberate, calculated or systematic acts constituting the offices.

87 I propose to fix sentences relevant to each offence and make the sentences concurrent. In respect of the offence the subject of Count 1 on the indictment I will impose a sentence of 6 months. In respect of Count 2 on the indictment I will impose a sentence of 5 years and a recognisance release order is to operate after Mr Sakovits has served a period of 2 years and 6 months.

Ronald Rudolph Sakovits

(1) In respect of Count 1 on the indictment, I sentence you to imprisonment for a period of 6 months commencing 26 April 2013 and expiring on 25 October 2013.

(2) In respect of Count 2 on the indictment I sentence you to imprisonment for 5 years commencing on 26 April 2013 and expiring on 25 April 2018.

The sentence imposed with respect to Court 1 is to operate concurrently with the sentence imposed in respect of Count 2.

On the expiration of a period of 2 years and 6 months, namely 25 October 2015, I order you be released upon giving security in the amount of $200, without surety, by recognisance to the satisfaction of the Court, that you comply with the conditions specified in s 20(1)(a) of the Crimes Act 1914.

In each case the security will be $200. The recognisance release orders I have made have been amended to so specify.

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Decision last updated: 06 August 2013