Brecker v The State of Western Australia
[2010] WASCA 32
•26 FEBRUARY 2010
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: BRECKER -v- THE STATE OF WESTERN AUSTRALIA [2010] WASCA 32
CORAM: OWEN JA
WHEELER JA
NEWNES JA
HEARD: 2 FEBRUARY 2010
DELIVERED : 26 FEBRUARY 2010
FILE NO/S: CACR 16 of 2009
BETWEEN: GRAHAM MICHAEL BRECKER
Appellant
AND
THE STATE OF WESTERN AUSTRALIA
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram :GROVES DCJ
File No :IND 363 of 2008
Catchwords:
Turns on own facts
Legislation:
Nil
Result:
Leave to appeal refused
Appeal dismissed
Category: B
Representation:
Counsel:
Appellant: In person
Respondent: Mr J A Scholz
Solicitors:
Appellant: In person
Respondent: Director of Public Prosecutions (WA)
Case(s) referred to in judgment(s):
Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321
Mallet v Mallet (1984) 156 CLR 605
Re An Application under the Magistrates Court Act 2004; Ex parte Brecker [2007] WASC 151
Scook v The Queen [2008] WASCA 114
OWEN JA: I agree with Wheeler JA.
WHEELER JA:
Background
This is an appeal against sentence. The appellant initially pleaded guilty to a total of 45 charges; however in September 2006 he informed his counsel that he intended to change his plea. Counsel then ceased to act for the appellant. Wisbey DCJ refused an application by the appellant to change his plea. The appellant then successfully sought a review of his initial committal for sentence, on the basis that the magistrate had acted in excess of jurisdiction: Re An Application under the Magistrates Court Act 2004; Ex parte Brecker [2007] WASC 151. The appellant was then, on 19 December 2008, convicted after trial, on an indictment containing 40 counts, of 35 counts of stealing money received with a direction, three counts of obtaining a benefit by fraud and one count of fraud. He was acquitted of one of the counts on the indictment. On 20 February 2009, Groves DCJ sentenced the appellant to a total of 5 years' imprisonment with parole eligibility. On 31 August 2009, Miller JA referred the application for leave to appeal to the hearing of the appeal. The appellant represented himself in this appeal.
Facts of the offending
In 1998, the appellant was employed by a firm of stockbrokers. He approached Tuart College, a TAFE college, with a proposal to run a course entitled "Introduction To Shares And The Stock Market". This proposal was accepted, and the appellant conducted one or two courses each year. They were aimed at "beginner to intermediate" level. The appellant resigned from his employment in the stockbroking industry in either September 2003 or April 2004. His wife was not then working. He informed his wife that he had secured employment with another firm; however, this was not the case.
The courses relevant to the offending were those run from March to May 2004, from June to August 2004, and from June to July 2005. A total of 15 complainants gave evidence that they had enrolled in the appellant's course and that at some point during the course the appellant proposed that they provide him with money which he would invest. The appellant had provided these students with a list of "blue chip" shares and it was the understanding of many complainants that these were the shares in which the appellant would invest (eg, Ms Welland, ts 33, Ms Litschauer, ts 703 ‑ 706). Others recalled being told of more nebulous
proposals, such as investment in "various financial instruments on the ASX" (Mr Huntly, ts 348 ‑ 355), but with a "guarantee" that the capital was secure. The general understanding of most students was that the investors' funds would initially be pooled, that any profits would be distributed pro rata and that the progress of the pooled funds invested would be discussed at each week's class. Another complainant was not a student of the appellant, but a friend of a student. He heard about the scheme through his friend, contacted the appellant, and provided him with money.
The total sum collected by the appellant in the course of this scheme was in the region of $330,000.
The appellant maintained throughout the trial that the money provided to him by the complainants was in fact loaned to him, or that they were "investing in me … in terms of my entities, yes, myself, my personal - my personal name and my related entities, yes" (ts 1236). It is fair to say that his explanation of the way in which he had discussed the proposed use of the moneys with the complainants, and his reasons for doing so, were, transparently, nonsense. For example, as to the discussion concerning one "loan", and its purpose, the appellant said:
And you told him that?‑‑‑I told him that 'I have to get the books right over that financial year end, 30 June 2005.' There was a need to get the balance sheet of the operating entity which required funds on that day.
On that day to do what?‑‑‑To be with me; to be resident with me; invest in me.
So you needed $2000 to balance the books. Is that what you're saying?‑‑‑No, that's not what I'm saying.
Well, what are you saying?‑‑‑I'm saying what I have just told you I have said.
…
O'SULLIVAN, MR: Why did you need the money?‑‑‑I did not need the money. It was just a loan.
Why did you borrow money if you didn't need it?‑‑‑The perhaps associated entity and together with myself required over that year end, 30 June - if they could access funds in a loanable funds manner, in a loan as a loan, it would be beneficial.
To do what?---I can't recall the intended purpose. I can't recall the intention.
In his interview with the Corruption and Crime Commission on 15 August 2005, however, he did admit (CCC ts 1 part 1 p 53):
[Interviewer]: They were informed by yourself that the money was going to be invested in the stock market?
[Appellant]: Yes.
…
[Interviewer]: Okay. You've also told us that that didn't occur?
[Appellant]: Yes.
[Interviewer]: Okay. And that the funds were used to pay debts that you had?
[Appellant]: Yeah.
Sentencing remarks
The learned sentencing judge was of the opinion that the offences were a "serious example" because of the position of trust held by the appellant. That trust arose because he was the teacher of all but one of the complainants, and second, as he had indicated to the complainants that he had a long history of employment in relation to the stock market (he had been employed as the accountant of a stockbroking firm) and that he was knowledgeable, experienced and honest. The offending occurred over an extended period (more than 15 months) and was of a callous and predatory nature.
The sentencing judge was provided with a number of psychological reports, victim impact statements and written references. Some of these appear to contradict others. For example, the report of Dr Watt refers to a time when the appellant, while working in his native South Africa, "inappropriately invested" sums of money; while the report of Ms Zuin suggests that the appellant has a low risk of reoffending, having "no prior record". His Honour, having raised the apparent discrepancy with the appellant's counsel, inferred that the appellant had not informed Ms Zuin of the events that occurred in South Africa.
While the psychological reports indicate that the appellant was suffering depression, his Honour concluded that there was "nothing of a psychiatric nature" to explain the appellant's offending. His Honour accepted that there was little need for personal deterrence, but considered that there was a strong need for general deterrence and that the appellant's prior good character could provide only minimal mitigation.
The appeal
There are 11 grounds of appeal:
1.The learned sentencing judge erred in finding that it was implied if not expressed that each student and the non‑student provided funds for investment in blue chip shares (while the appellant instead invested in warrants and options).
2.The learned sentencing judge erred in finding the appellant did not put $20,000 into a fixed deposit, inferring appellant conduct contrary to direction.
3.The learned sentencing judge erred in finding, with respect to the appellant's conduct, that the appellant on occasion discouraged return of complainant contributions by the appellant stating that the contributions were safe where it was.
4.The learned sentencing judge erred in finding that the appellant blamed the victims for their misfortune.
5.The learned sentencing judge erred, when stating the appellant's admission of unsatisfactory conduct, as his Honour failed to state that this admission was in appellant reference to the actual investment losses he generated with complainant contributions in the operative non‑formal manner of investment management (as against that which the appellant stated, in relation to the conduct admission, he believed would have been the case in a formal, client‑based environment).
6.The learned sentencing judge failed to give sufficient weight to the effect of the delay between the commencement of the related investigation and the conclusion of the matter on issues of fairness, rehabilitation and general deterrence.
7.The learned sentencing judge failed to accord sufficient weight to, or failed to adequately account for, the expert medical opinions of a psychiatrist and psychologist that significantly support mitigation of the severity of the sentence to be imposed.
8.The learned sentencing judge erred in not according sufficient weight to the appellant's conduct of assisting complainants and investigating authorities with matters, including the appellant's behaviour in regards to his empathy displayed, his considerable contrition for the effects of his victims' losses sustained, and the appellant's provision of timely advices, meetings and assistance to victims and their representatives.
9.The learned sentencing judge erred when his Honour stated that the victims were not aware of the independent operating status of the appellant's provision of financial advisory services; and, when his Honour stated that the appellant engaged in an example of 'fraudulent means or deceit' with respect to particular complainant contributions.
10.The learned sentencing judge failed to properly account for, or take sufficient recognition of, the particular compensatory investments for the benefit of complainants that were paid for from the appellant's own funds, in substitute of the complainant's moneys; the particular appellant payments from his own personal funds to complainants in lieu of complainant's [sic] funds invested in the pool‑of‑funds; the particular appellant approach of recognition of cash in the pool‑of‑funds that had no ultimate prejudicial effect on complainant beneficial interest; the appellant repayments to victims; and, the effective level of equivalent worth of the complainant's [sic] moneys employed for the appellant's personal, private consumption.
11.The sentences imposed by the learned sentencing judge are each manifestly excessive and all are manifestly excessive.
I deal with the grounds in turn.
Ground 1
What his Honour said was, relevantly:
[The complainants] each gave evidence substantially to similar effect along the following lines: at each course you made a proposal to students that as part of the course, if they wished to participate, they could provide you with funds to be pooled as a group to be invested in blue chip shares.
You provided the students with a list of so‑called blue chip companies and they each understood that it would be in these companies that shares would be purchased with the pool of funds. The rationale for them to participate was to follow the progress of those shares over the duration of the course and thereby gain an understanding of how the share market works. It was left to your discretion as to which blue chip shares the pool of funds was invested in.
It was the understanding generally also that any profits made from the investments would be distributed pro rata to the amount invested by any individual. There was also the expectation that the progress of the pooled funds invested would be discussed at each of the following week's classes. That does not seem to have transpired. Against that background, it was implicit, if not expressed by those complainants who attended your classes and provided funds to you, that their money would be invested by you in blue chip shares.
…
In a number of cases, but not all, you also "guaranteed" the funds provided to you for investment. In many instances you also provided an acknowledgement of receipt of investment funds. There were, too, other ‑ too, t-o-o - there were, too, other occasions when you actively solicited funds on other pretext; for example, in the case of the complainant Ms Welland, by offering an opportunity to make further short-term investments on the share market.
It is correct, I think, to say that not all complainants should be understood as having directed, or expected, that their money would be invested in "blue chip shares", although many complainants were given that explanation. However, all complainants expected that their money would be invested (rather than used for the appellant's own purposes), and in a way that ensured the safety of that capital. The point his Honour was making was that the funds were used for the investment purposes discussed with the complainants.
A finding that the complainants directed the appellant to invest the funds in a manner different from that in which he in fact invested the funds was a direct consequence of the verdict of guilty found by the jury on charges of stealing money received with a direction. This ground fails.
Ground 2
Ground 2 relates to the complainant Ms Welland. The appellant informed Ms Welland that he and a partner had set up a new business and that, were she to deposit money in a term deposit, she would receive double the bank interest in profits. She deposited the money into a term deposit, and the appellant used the money as a bond for his financial services licence. On this count, the appellant was acquitted of stealing money received with a direction and convicted of the alternative offence of obtaining a benefit by fraud.
The statement objected to by this ground is:
It was on the basis of that representation and your offering double the bank interest rate that Ms Welland paid over the sum of $20,000, the subject of count 21, which was not put into a term deposit but rather was used by you to secure your Australian Financial Services security bond.
The appellant asserts that this is incorrect and "highly likely to result in a more severe sentence" (AB 33). The statement by his Honour was inaccurate, since the appellant was acquitted of stealing contrary to a direction on this count, but convicted of the alternative of gaining a benefit by fraud.
The evidence of the complainant for that count, Moyra Welland [ts 91 ff], was that the appellant had told her that, at the suggestion of a business partner of the appellant's, the $20,000 would be invested in a term deposit account in the short term, 'until the market became good'. The term deposit was to be for her and she 'was supposed to be able to go to the bank any time ... to claim it'.
The gravamen of the offence of which the appellant was convicted was that he had deceived Ms Welland about the use which would be made of her money. The precise nature of the deceit was not material for sentencing purposes. Ground 2 fails.
Ground 3
Numerous examples can be seen in the transcript in which complainants refer to asking for their money back, or to suggesting that they may want their money back, in response to which the appellant made excuses about why they could not be refunded, and talked them out of taking their money back. For example (Ms Welland ts 114):
And you were saying that you wanted to withdraw some of the money that you had invested?‑‑‑Yes.
And did you speak to Mr Brecker about that?‑‑‑I did.
And what was your discussion with him about that?‑‑‑I just felt I wanted to put it somewhere else because at that time it was - well, actually in May I don't - was there - yeah, there was still 15 there, that's right. It was just in - well, assumedly in a cash management trust which didn't exist. That was from my understanding now, and so I said, 'I may as well put it somewhere else and leave it sitting there.'
Yes. And what did he say to that?‑‑‑Well, he tried to discourage me actually; sent me all these emails which were coming up, you know, to advise me that it was safe where it was. There was an email sent like that. [Note that the words in italics are those used by his Honour.]
(Mr Pryor, ts 339):
Who mentioned it then?‑‑‑It was brought up then at the meeting where we were wanting to get our money back because of the uncertainty of where the money has been put. Then Graham talked us around into reinvesting that money back with him, which we did.
Mr Illingworth (ts 632 ‑ 633), Ms Litschauer (ts 722) and Ms Davini (ts 191 ‑ 193) also gave evidence of the appellant discouraging requests for return of funds, on a variety of pretexts.
It was open for the trial judge to find that the appellant had discouraged the complainants from seeking the return of their investment. It was open to him to conclude that assurances of safety had, directly or indirectly, been made in that context. This ground fails.
Ground 4
At trial, the appellant gave evidence over four days. The trial judge also had access to a DVD recording of the appellant's interview with officers from the Corruption and Crime Commission. His Honour was therefore in a position to be able to evaluate the appellant's attitude toward the complainants. Further, in opening addresses, counsel for the appellant expressly suggested to the jury that they "might conclude that [the complainants] were a little bit greedy" (ts 63). During his interview with the Corruption and Crime Commission, the appellant did appear to place the blame with the complainants, stating "despite the cautious nature of the … presentation … somebody would always come to me with a profit motive" (CCC ts 1 part 1 p 25) and that "[n]ine times out of 10 it was an impetus from the … student" (CCC ts 1 part 1 p 31).
The general tenor of his evidence was that it was the complainants' desire for profits, not his need for funds, which had led him to act as he did: see, for example, ts 1258:
What I'm going to suggest to you, Mr Brecker, or what I am suggesting to you is that you were desperate for money by the time the first transaction that we're interested in on 1 April came alone?‑‑‑Ms Welland herself impulsed me to do that.
This ground fails.
Ground 5
This ground appears to relate to the following sentencing remark:
You participated in a record of interview on 15 August 2005, with investigators from the CCC. At that interview you were again contrite. You acknowledged your conduct to have been despicable and, quote 'utterly disgraceful'. (sentencing ts 23)
The appellant did in fact make these statements in his interview with the Corruption and Crime Commission. His Honour appeared to consider them as some evidence of contrition. However, the appellant has explained to us that he was intending to admit only that the investment losses were "disgraceful", as opposed to his conduct in using money entrusted to him for speculation and for his own expenses. His current explanation suggests that he does not accept that his behaviour was disgraceful, and so reflects very poorly upon him. The error made by the sentencing judge was favourable to him. This ground fails.
Ground 6
Delay itself is not mitigatory. Delay in combination with other relevant sentencing factors favourable to the offender, such as progress towards rehabilitation, is mitigatory. As a consequence, the reason for the delay is not ordinarily relevant. It may be so if the delay was attributable to the offender: Scook v The Queen [2008] WASCA 114 at [31]. I accept that the delay in this case was not attributable to the appellant, but I see no reason to regard this as mitigatory.
Ground 7
I note as to grounds 7 and 8, that a failure to give sufficient weight to a relevant sentencing consideration (as alleged here) only gives rise to an express appellable error if it amounts to a failure to exercise the discretion actually entrusted to the court: Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321 at 330 approving the statement of Gibbs CJ in Mallet v Mallet (1984) 156 CLR 605 at 614.
His Honour was provided with a presentence report, the psychological report of Dr Zuin, the psychiatric report of Dr Watt, an extended pre‑sentence report, and the psychiatric report of Dr Hall. The authors of these reports agreed that the appellant appeared to be suffering a probable major depressive disorder. With the exception of Dr Zuin, none made a causal link between the appellant's illness and his offending. The trial judge made reference to the salient points of each of these reports, and it has not been established that he misunderstood any of them.
The most favourable report was that of Dr Zuin, but, as his Honour noted, it had been compiled when the appellant was proposing to facilitate the course of justice by pleading guilty, and it therefore carried less weight. In any event, having seen the appellant during a lengthy trial, his Honour was well able to assess for himself the extent to which the appellant's conduct was deliberate, and the degree (if any) of his remorse.
Ground 8
I do not accept that the appellant displayed any contrition or empathy with his victims. Many referred to difficulties in getting him to return their calls, and evasiveness when he was questioned by them. His eventual apologies to them are as consistent with a desire to avoid prosecution as with empathy or contrition. See also the observations relating to ground 5.
Ground 9
There was evidence at trial that at least some of the complainants were unaware of the appellant's independent status (that is, independent from the college) (for example, Ms Litschauer ts 727 ‑ 728, Ms Johnston ts 678 ‑ 679). However, as correctly stated by the respondent in written submissions, the comments referred to by the appellant in his submissions in relation to this ground are taken from the trial judge's summing up of the State case and are not, as the appellant alleges, findings of fact adverse to him. They are irrelevant for the purpose of a sentence appeal.
Ground 10
Before us, the appellant took exception to the learned sentencing judge's description of his offending as a "Ponzi scheme"; that is, as a scheme by which earlier victims are given moneys out of funds provided by later victims, so that the former are given an impression of a legitimate and profitable investment scheme. It is common ground, however, that some of the moneys paid to some complainants did come from the funds of others.
The appellant also maintained strongly, before us, that a significant proportion of the money repaid to complainants came from his "personal money", although, save for a fee of between $10,000 to $20,000, he was vague about what the source of his "personal money" could have been. It was clear from his cross‑examination at trial, however, that there was no such "personal money" (leaving aside the fee referred to above): see ts 1271 ‑ 1274 (and CCC interview transcript, AB vol 2 at 169).
The true position appears to be as follows:
•Over $330,000 in total was provided to the appellant by the complainants, on the basis that it would be invested, that they would probably or certainly derive profits, that their capital was safe and would later be returned.
•Roughly 60% was actually invested by the appellant, in speculative investments. Some profits were made from those investments, but ultimately all of the capital was lost.
•Over half the money invested (around $185,000) was never returned to the complainants. Many complainants lost all of the money they gave the appellant, and some of those lost sums were large (eg, Mr Illingworth lost $60,000, an amount described in his victim impact statement as his "life savings").
•Money that was paid to complainants appears to have come from three sources:
- funds of other complainants
- profits from investments made with their own moneys or the moneys of other complainants
- a maximum of around $20,000 from other funds available to the appellant.
•At least a substantial proportion of the payments to complainants were made, not from a sense of obligation or contrition, but in order to further the deceptive scheme or to avoid detection.
I can see no mitigation in any of this.
Ground 11
The appellant's offending involved over $330,000, of which over half was lost, and 15 complainants, and took place over more than a year. The appellant was, in relation to 14 complainants, their teacher and purported to be an expert. He knew them to be unsophisticated investors. The appellant does not have the benefit of a guilty plea and still appears unable to accept the complete impropriety of his behaviour. Having examined the cases referred to by the appellant, I see no basis for a finding that a total effective sentence of 5 years' imprisonment could be seen as outside the range of sound sentencing discretion. This ground fails.
Conclusion
I would refuse leave to appeal on all grounds and dismiss the appeal.
NEWNES JA: I agree with Wheeler JA.
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