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Recent cases alert
R v Shoma [2019] VSC 367 — irrespective of number of immediate victims in terrorism offences, assessment of harm must necessarily take into consideration harm done to Australian public and Australian polity.

1. Overview

Section 16A(2)(e) provides that a court must take into account any injury, loss or damage resulting from the offence as it is relevant and known to the court.

Section 16A

(2) In addition to any other matters, the court must take into account such of the following matters as are relevant and known to the court:
…
(e)  any injury, loss or damage resulting from the offence;

2. Operation of section 16A(2)(e)

2.1 ‘Resulting from the offence’

The courts have interpreted injury, loss or damage resulting from the offence broadly.

In ACCC v Rana [2008] FCA 374, the offender failed to comply with notice requirements under the Trade Practices Act 1974 (Cth).¹

 These notice requirements were issued after the offender had made representations that claimed the ‘Rana System’ would cure terminal or life threatening conditions when this was not the case. The Court described the injury and damage resulting from the offence at [51]:

The offences in the present case had the result that people dying of cancer and / or their families were further traumatised by having to give information to the ACCC so that it could bring the civil proceeding against Paul Rana to ensure that his conduct was stopped. This was a particularly cruel consequence of Paul Rana’s conduct. It caused further distress to people in a vulnerable position. The circumstances of the offences (s 16A(2)(a) of the Crimes Act) and the damage and injury resulting from the offences (s 16A(2)(e)) mark the offences in this case as serious contraventions.

In the drug importation case of Ngo v The Queen [2017] WASCA 3, Buss P (Mazza JA agreeing) considered the effect of the offence on potential consumers and society generally at [63]:

(d) [A]s to s 16A(2)(d), the ‘victim’ of the offence was the Australian community generally. The illicit drug trade is a scourge. It inflicts very significant damage on the people who consume the drugs. Also, the deleterious effects of illicit drug consumption extend to the families, friends and associates of the consumers and society generally.

(e) As to s 16A(2)(e), commercial trafficking in illicit drugs results in injury, loss or damage of the kind I have referred to in relation to s 16A(2)(d) … (emphasis added).²

In ACCC v Santo Pennisi [2007] FCA 2100, the corporate offender pleaded guilty to making false or misleading representations pursuant to the Trade Practices Act 1975 (Cth) s 75AZC(1)(a)³ in relation to charges of mixing different petroleum fuel types. Logan J considered damage and loss arising from the offence at [46]:

[T]he consumers who purchased adulterated fuel have at least suffered a monetary loss. They didn’t get what they paid for. BP, one might readily infer, has to some extent at least had the goodwill associated with its trademarks, which it doubtless considers very valuable, diminished at least in the locale concerned. Again, as I have mentioned, whether or not there is any damage beyond that in terms of the engines of vehicles is at least an open question.

2.2 Where no identifiable victim

Courts have consistently held that injury, loss or damage may arise from a federal offence even where there is no identifiable victim.⁴

This has been discussed most commonly in sentencing of financial market offences. For example in the insider trading case of Kamay v The Queen [2015] VSCA 296 the damage to the reputation of the ABS in the marketplace, and the profound distress to their employees was considered damage under s 16A(2)(e).⁵

Where there is a breach of director’s duties, a company’s shareholders as well as the investing public will suffer harm as a result of the offence. In R v Sigalla [2017] NSWSC 52, the Court held at [85]:

It was not only TZ Ltd and its shareholders who were harmed by the offender’s conduct; the investing public was also affected. Private investment in public companies is a significant aspect of the market economy. If potential investors fear that the directors of public companies will misuse their positions to their own advantage, they will be loath to invest and the market will be deprived of capital which would otherwise have been available. The importance of safeguarding and restoring investor confidence in the ASX is a significant reason for criminalising the dishonest use of the position of a director and also bears on the sentences to be imposed (emphasis added).

Where there is fraud against the Commonwealth, the integrity of the taxation system and society, in general, may suffer damage as a result of the offence.

In Agius v The Queen [2015] NSWCCA 200, Barthurst CJ affirmed the sentencing judge’s comments at [1083]:

[F]or the purposes of s 16A(2)(e), the immediate injury suffered by the Commonwealth was a very considerable loss of revenue. In respect of the eight companies of which evidence was given, the financial loss was said to be in excess of $5 million. But there is also an intangible loss. The Australian taxation system, based as it is on self-assessment, depends for its integrity upon the honesty of citizens. Of course, there will always be those who choose to cheat. They are cheating their fellow citizens, casting a greater burden on each of them. Further, when it is known that the system can be, and is, cheated, the very structures of society are damaged. The self-assessment system depends not only on the honesty of taxpayers, but on the confidence of taxpayers that others will make their proper contributions, or that, if they do not, they will be adequately punished (emphasis added).⁶

In R v Jousif [2017] NSWSC 1299, the offenders were convicted of conspiring to bribe a foreign official. The Court held at [259]:

It was put on behalf of all offenders that no loss had been sustained by the offence. It is common ground that there is no evidence about what happened to the money after it was transferred to Iraq, and, in particular, no evidence that it ever made its way into the hands of an Iraqi public official. However, I do not accept that it follows that no damage resulted from the offence. The conspiracy contemplated and required that money be transferred from Australia to Iraq. An amount in the order of US$1 million was transferred. The purpose of its transfer was known by the direct recipient, Mr Al Zubaidi, to be to bribe a foreign official. It can hardly be thought that a payment of that kind, and particularly of such a magnitude, would not have had a tendency to reinforce not only Mr Al Zubaidi’s (apparently well-founded) belief that foreigners were prepared to pay substantial sums to bribe Iraqi officials to get infrastructure contracts but also Mr Jousif’s and Ms Abraham’s belief that it was worthwhile spending time and effort soliciting Australian business people to pay such sums. This, in my view, amounts to damage within s 16A(2)(e).

In DPP (Cth) v Nippon Yusen Kabushiki Kaisha [2017] FCA 876, the offender, a corporation, was convicted of an offence of giving effect to a cartel provision contrary to s 44ZZRG(1) of the Competition and Consumer Act 2010 (Cth).⁷

 These offences involved shipping almost 70,000 vehicles to Australia while engaged in anti-competitive conduct. Wigney J noted the nature of the harm to the market which may arise as a result of anti-competitive conduct at [252]:

[A]s with other market related offences, it would be wrong to approach this offence as if it was a victimless offence, simply because no specific individual or quantified loss can be identified. The cartel offence in s 44ZZRG(1) is part of a suite of provisions in the C&C Act that are designed to protect the integrity of Australia’s markets and economic system. Our economic system is based on the philosophy that private enterprise and competition will foster productivity, efficiencies and innovation for the greater good of the community. Cartel conduct, like other anti-competitive behaviour, is inimical to and destructive of our markets and economic system. It leads to a loss in public confidence in our markets and economic system, which can itself harm the economy (emphasis added).

In drug importation cases, the potential harm of the offence may extend not only to consumers of the drug, but to ‘the families, friends and associates of the consumers and society generally.’⁸

In Ngo v The Queen [2017] WASCA 3, Buss P (Mazza JA agreeing) considered the effect of the drug offence on potential consumers and society generally at [63]:

(d) [A]s to s 16A(2)(d), the ‘victim’ of the offence was the Australian community generally. The illicit drug trade is a scourge. It inflicts very significant damage on the people who consume the drugs. Also, the deleterious effects of illicit drug consumption extend to the families, friends and associates of the consumers and society generally.

(e) As to s 16A(2)(e), commercial trafficking in illicit drugs results in injury, loss or damage of the kind I have referred to in relation to s 16A(2)(d) … (emphasis added).

However, the High Court in Adams v The Queen [2008] HCA 15 held at [7] that because the case involved the interception of drugs before they reached any potential consumers, there was no injury or damage arising under s 16A(2)(e).

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3. Section s16A(2)(e) and Pecuniary Penalty Payments

The has been limited judicial comment on the relationship between s16A(2)(e) of the Crimes Act 1914 (Cth) and s 320 of the Proceeds of Crimes Act 2002 (Cth).

In R v Host [2015] WASCA 23, Basten JA noted but did not decide on the effect of pecuniary penalty payments made pursuant to s 320 of the Proceeds of Crimes Act 2002 (Cth) in relation to assessing the impact of the offence under s 16A(2)(e). His Honour noted at [24]–[25]:

The only loose end is whether mere payment pursuant to a pecuniary penalty order can be taken into account under s 16A(2)(e). Once again the scope for inconsistency is confined to those cases in which the Commonwealth is also the victim of the offence, it always being the beneficiary of a pecuniary penalty order. It is not necessary to answer this question. However, it may be significant that the Commonwealth incurs very considerable, unrecoverable costs in compliance, audit and investigation systems designed to protect its revenue from, and to detect, fraudulent and other dishonest conduct. Of course, the real victims of such conduct are the members of the Australian community as a whole because it reduces the funds available for essential and other services and increases the taxation burden on honest taxpayers.

Applying the law to the facts of this case, s 16A(2)(e) and (f) of the Crimes Act apply to the payment that preceded the application for the pecuniary penalty order and s 320(a) applies to the respondent’s cooperation, whether or not it can sustain a finding of (real) contrition (emphasis added).⁹

1. The Trade Practices Act 1975 (Cth) was repealed and replaced with the Competition and Consumer Act 2010 (Cth).[↩]
2. But see Adams v The Queen [2008] HCA 15, where the High Court held at [7] that because the case involved the interception of drugs before they reached any potential consumers, there was no injury or damage arising under s 16A(2)(e).[↩]
3. The Trade Practices Act 1975 (Cth) was repealed and replaced with the Competition and Consumer Act 2010 (Cth). See now, Competition and Consumer Act 2010 (Cth), Sch 2, s 29(1)(a).[↩]
4. See further Victim of the Offence.[↩]
5. Kamay v The Queen [2015] VSCA 296, [50].[↩]
6. See also R v Zerafa [2013] NSWCCA 222, [36] (Hoeben CJ); R v Host [2015] WASCA 23, [24]; R v Dulhunty [2015] NSWSC 1747, [55]; R v Curtis (No 3) [2016] NSWSC 866, [24]. See further R v Sakovitz [2013] NSWSC 464.[↩]
7. The Competition and Consumer Act 2010 (Cth) was amended by the Competition and Consumer Amendment (Competition Policy Review) Act 2017 (Cth) and the provision renumbered, see now s 45AG(1) of the Competition and Consumer Act 2010 (Cth).[↩]
8. Ngo v The Queen [2017] WASCA 3, [63].[↩]
9. These comments were affirmed in R v Jafari [2017] NSWCCA 152 at [38]–[39]. See further Contrition and Reparation.[↩]