Davis v The Queen - [2002] WASCA 298

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : COURT OF CRIMINAL APPEAL

CITATION: DAVIS -v- THE QUEEN [2002] WASCA 298

CORAM: PARKER J
ROBERTS-SMITH J
SHEPPARD AUJ

HEARD: 8 OCTOBER 2002

DELIVERED : 30 OCTOBER 2002

FILE NO/S: CCA 91 of 2002

BETWEEN: DIANE LOUISE DAVIS
Applicant
AND
THE QUEEN
Respondent

Catchwords:

Criminal law and procedure - Sentencing - Conviction on plea of guilty to 12 counts of obtain benefit by fraud - Sentence of two years for each count to be served concurrently - Whether sentence manifestly excessive - Serious offences over a period of time - Mitigating factors - Whether Judge erred in not exercising discretion to suspend sentence

Legislation:

Criminal Code, s 409(1)(c)

Result:

Application for leave to appeal allowed
Appeal dismissed

Category: B

Representation:

Counsel:

Applicant: Ms C A McKenzie
Respondent: Mr J Mactaggart

Solicitors:

Applicant: McKenzie Lalor
Respondent: State Director of Public Prosecutions

Case(s) referred to in judgment(s):

Barrick (1985) 81 Cr App R 78
Greer v The Queen, unreported; SCt of WA; Library No 960173; 1 April 1996
Lowndes v The Queen (1999) 195 CLR 665
R v Birch (1993) 69 A Crim R 181
R v Burke (1994) 75 A Crim R 48

Case(s) also cited:

Dinsdale v The Queen (2000) 202 CLR 321
House v The Queen (1936) 55 CLR 499
R v Carreras (1992) 60 A Crim R 402
R v Latham (2000) 117 A Crim R 74

JUDGMENT OF THE COURT: In this matter, the applicant was convicted of 12 counts of gain benefit by fraud, contrary to s 409(1)(c) of the Criminal Code. She was sentenced to two years imprisonment on each count, to be served concurrently. She seeks leave to appeal against the severity of the sentences which were imposed.
At the time of the commission of the offences, the applicant was an employee of the Commonwealth Bank of Australia. She had been employed by the bank for just over 21 years. In that time, she worked in many areas of the bank, eventually holding the position of Manager Personal Lending. She had a sound knowledge of the day‑to‑day operations of the bank. On 23 September 1993, the applicant opened a Streamline Account with an overdraft limit of $2,000. On 6 December 1995, she opened a Staff Streamline Account with no overdraft facility attached. On 3 April 1998, the applicant and her husband applied for an Access Advantage line of credit account with an overdraft limit of $35,000. The application required the applicant to disclose, in writing, her full financial position detailing her assets and liabilities. Another staff member who was authorised to review and approve the applicant's application approved the application on the basis of the details disclosed.
Counts (1) to (3) and counts (7) to (12) of the indictment relate to the applicant unlawfully manipulating the bank's computer system. Between 6 April 1998 and 30 June 2000, she succeeded, without the bank's authority, in increasing the Access Advantage line of credit account from $35,000 to $50,000; between 1 January 1999 and 16 October 2000, an unauthorised $5,000 increase in the Staff Streamline Account was made; between 1 January 1999 and 1 September 2000, the Streamline Account was increased by $3,000; between 29 September 2000 and 29 December 2000, an increase from $50,000 to $65,000 was made in the Access Advantage line of credit account; on 9 February 2001, that account was further increased from $65,000 to $80,000; on 16 May2001, it was increased from $80,000 to $100,000; on 2 August 2001, it was increased from $100,000 to $120,000; on 24 September 2001, it was increased from $120,000 to $150,000; and on 20 November 2001, an increase in that account of $150,000 to $175,000 was made. There were no further increases because, during the applicant's absence on holidays, the fraudulent conduct in which she had engaged was discovered by the bank.
Count (4) concerned an application made by the applicant on 19 January 1999 for a Commonwealth Bank Finance Consumer Loan for $20,000. In her application, she failed to include details of the true extent of her liabilities, knowing that this would make her application look more attractive and improve her chances of having the loan approved. The loan was approved and $20,000 was made available to the applicant.
Count (5) concerned an application made by the applicant on 3 March 1999 for a personal loan of $20,000. Again, she failed to include details of the full extent of her liabilities, knowing that this would make her application look more attractive. As a result, the loan was approved and $20,000 was made available to the applicant.
Count (6) concerned an application made by the applicant on 5 January 2000 for a Mastercard and again failing to include details of the full extent of her liabilities. The application was approved and $3,000 was made available to the applicant by the bank.
The total benefit to the applicant as a result of these various transactions was $191,000.
The applicant pleaded guilty to all 12 counts on the indictment when she appeared before Muller DCJ on 13 May 2002. She was remanded on bail to 14 May 2002 for sentence. In his remarks made when passing sentence, the learned Judge said that the applicant had manipulated the system and unlawfully increased the line of credit facility without the consent or knowledge of the bank. She used the money for her own personal purposes. His Honour noted that, of the sum misappropriated, $110,000 had been repaid. The balance of the amount outstanding has been secured by a mortgage over property owned by the applicant and her husband.
The applicant was born on 10 October 1962 and was aged 39 years at the time she was sentenced. She has no previous criminal convictions. As his Honour said, her antecedents were entirely favourable. He referred to the fact that her counsel had emphasised that she had pleaded guilty at the first opportunity to each of the charges and that she had co‑operated with the authorities at all times. He said to the applicant that her plea of guilty was a very important factor to be taken into account in the sentencing process. He told her that she was entitled to a discount in what would otherwise be the appropriate sentence because of her early plea of guilty. He said that by pleading guilty, she had demonstrated remorse and an acceptance of responsibility for her wrong‑doing.
His Honour then referred to the fact that her husband had been in financial difficulties because of a significant reduction in his income. This was brought about by the fact that the mining company by whom he was employed reduced substantially the amount of overtime that he had been accustomed to working. It was apparently this matter that led to the applicant's manipulation of the system. As his Honour said, the situation "snowballed" and became increasingly worse as the years went by.
His Honour said that the applicant's counsel had emphasised that the bank was never deceived because no attempt was made by the applicant to conceal her manipulation of the system. But his Honour remarked that although that was so, the fact remained that a considerable amount of money was stolen. He also said that it was somewhat surprising that the theft had not been discovered at an earlier point in time.
The applicant is the mother of two children aged 13 years and 9 years at the time she was sentenced. She is the principal carer for those children. His Honour referred to the pre‑sentence report which described the applicant as "a quiet and mature person who appeared extremely regretful of her actions". The report emphasised that the applicant was under financial strain at the time she committed the offences. His Honour also referred to the fact that the applicant had had to use money standing to her credit in her own superannuation fund to help repay the outstanding amount to the bank.
His Honour noted that the maximum statutory penalty for each of the offences was imprisonment for a period of up to seven years. He said to the applicant that she had pleaded guilty to a series of offences, representing a systematic and continuing course of criminal conduct extending over a considerable period of time. He added:
"While your antecedents and employment history are entirely favourable there is a limit to the mitigatory weight that can be attached to such factors because in a case such as this your position as a manager in the personal lending field was made possible by your perceived good character and your financial experience.
...
While I certainly must take your antecedents into account in mitigation they do not carry the weight they might carry in relation to offences of a different nature. I have little doubt that your degree of culpability lies at the upper end of the scale. In reaching this conclusion I have relied upon the sentencing criteria applicable to this type of offence and approved of by the Court of Criminal Appeal in a series of cases including, for example, Greer v R 960173C and R v Birch (1993) 69 A Crim R 181.
You were a long‑time employee of the bank. You held a responsible managerial position and you were familiar with the system in place for increasing overdraft facilities. You took advantage of your knowledge and possession as an employee to benefit yourself at your employer's expense. In dishonestly exploiting the system as you did you have breached the trust in which you were held by your employer and other employees in the bank.
This was not an isolated act of fraud that could be described as spontaneous or out of character. As I have already said, the evidence reveals a persistent and continuing course of fraudulent misconduct extending over many years, culminating in the misappropriation of $191,000. The repetitive pattern of your offending over a period of time illustrates the degree of premeditation and planning involved.
...
This type of offending has a significant impact on public confidence in the banking industry. It has the potential of eroding public confidence in the banking system and to that extent adversely affects the reputation and standing of other employees in the banking industry. For these reasons I believe the offences are so serious that only imprisonment can be justified. While you are unlikely to offend again - and there seems little need for the element of personal deterrence to feature strongly in any sentence I impose - I must take into account the element of public deterrence and impose a sentence that will serve as a real warning to others who, like you, might be tempted to take advantage of the special position of trust in which they are held in order to misappropriate money or property belonging to an employer."
His Honour said that a sentence of imprisonment was inevitable. He said that he had given the closest consideration to whether it would be possible to suspend any immediate term of imprisonment imposed. He added:
"I have reflected long and hard on that issue and have also researched the various authorities to find any precedent for suspension in circumstances such as these."
He said that, having considered all the factors which he had mentioned and some others, he had come to the reluctant conclusion that the offences were so serious and the scale of offending so large that he could not, in this case, suspend the term of imprisonment that was appropriate. He said that he realised that she was in a special predicament because of her children and he realised how difficult it would be for her to be imprisoned and removed from her family. He said that the most he could do, consistent with his duty, was to discount the sentence very substantially to reflect the fact that her two dependent children would be without their mother for a substantial period. He added that the sentence would also be discounted because of her early plea of guilty, her favourable antecedents and the other special circumstances that were mentioned. He said that he believed the starting point was a term of five to six years' imprisonment. He proposed to reduce that substantially to a term of two years to reflect the factors he had mentioned. He sentenced the applicant to two years' imprisonment on each count and directed all sentences be served concurrently. He directed that the applicant be eligible for parole in respect of the terms of imprisonment he imposed.
Before we come to the submissions made on behalf of the applicant, we should refer to the two authorities cited by his Honour. We go first to R v Birch (1993) 69 A Crim R 181. The principal judgment was delivered by Wallwork J, with whom Seaman and Murray JJ agreed. In the course of his judgment, Wallwork J made extensive reference to the decision of the English Court of Appeal (Criminal Division) in Barrick (1985) 81 Cr App R 78. There, the Lord Chief Justice said (at 81):
"The type of case with which we are concerned is where a person in a position of trust, for example, an accountant, solicitor, bank employee or postman, has used that privileged and trusted position to defraud his partners or clients or employers or the general public of sizeable sums of money. He will usually, as in this case, be a person of hitherto impeccable character. It is practically certain, again as in this case, that he will never offend again and in the nature of things he will never again in his life be able to secure similar employment with all that means in the shape of disgrace for himself and hardship for himself and also his family."
His Lordship went on to say that, in general, a term of immediate imprisonment was inevitable, save in very exceptional circumstances, or when the amount of money obtained was small. The Lord Chief Justice listed some of the matters to which the Court would pay regard in determining what the proper level of sentence should be. The factors he mentioned were:
"(1)The quality and degree of trust reposed in the offender including his rank;
(2)The period over which the fraud or the thefts have been perpetrated;
(3)The use to which the money or property dishonestly taken was put;
(4)The effect upon the victim;
(5)The impact of the offences on the public and public confidence;
(6)The effect on fellow employees or partners;
(7)The effect on the offender himself;
(8)His own history;
(9)Those matters of mitigation special to himself such as illness; being placed under great strain by excessive responsibility or the like; where, as sometimes happens, there has been a long delay, say over two years, between his being confronted with his dishonesty by his professional body, with the police and the start of his trial; finally, any help given by him to the police."
The decisions of Birch and Barrick were discussed in the case of Greer v The Queen, unreported; SCt of WA; Library No 960173; 1 April 1996. In that case, Murray J, who wrote the principal judgment, said that the sentencing guidelines laid down in Barrick had been adopted and applied by this Court (at page 7 ‑ 8). His Honour, however, referred to an earlier decision of the Court and noted that the Court would not consider the range of sentences set out in Barrick to be always appropriate and each case must be considered on its merits, taking into account various factors relevant to sentencing, of which the matters set out in Barrick formed part. His Honour referred to R v Burke (1994) 75 A Crim R 48 (at 51) where the Court accepted the relevance of the matters to be considered by the sentencing Court as set out in Barrick without adopting the actual guidelines relating to an appropriate penalty. Murray J said that "[t]hat was simply because the guidelines applicable in England were provided against the background of the applicable statutory provisions as to sentencing and the judicial views as to proportionate sentences applicable in the United Kingdom".
It needs to be emphasised that, in the present case, Muller DCJ did not refer to Birch or Greer because of the particular circumstances of those cases and a perceived relationship between those circumstances and the circumstances of the present case. As one would expect, no case in this area will be the same as any other and the facts in both Birch and Greer differ substantially from those here. The two authorities were cited for their principles and for no other reason.
In a carefully constructed submission, counsel for the applicant made three points. These were:
1.His Honour had placed the applicant in the category of persons who were guilty of far greater criminality. Here, there was not an attempt to steal in the usual sense. The money was revealed in the bank's accounts and other records as owing by the applicant. She did not attempt to hide this or the fact that as she continued to take money in the way that has been described, she was responsible for its repayment. She did not use a false account or do what she did in a false name. In this sense, there was not the concealment that is usually present in cases of this kind.
2.Counsel suggested that the Judge had given the applicant credit, not for total restitution, but for partial restitution. This was because, so it was submitted, the Judge did not take into account the fact that the unpaid balance of approximately $62,000 was added to the amount owing under the mortgage of the home of the applicant and her husband when the bank, by agreement, agreed to re‑finance the mortgage to enable this to be done.
3.The final and most emphasised submission made on behalf of the applicant was that the Judge had omitted to mention the fact that because of her misconduct, the applicant had placed her superannuation in jeopardy and, under the terms of the superannuation deed, had forfeited the sum of $82,970. This was not credited to the applicant's accounts in any way. It was a forfeiture and, so counsel said, the bank benefited to the extent of the sum involved. It is true to say that his Honour did not mention this matter.
We deal with these submissions as follows. Each, of course, was designed to show that his Honour's discretion had miscarried.
The factual basis underlying the first submission is correct. There was no attempt to conceal what the applicant had done. She did everything in her own name and, although acting without any authority whatsoever from the bank, she allowed a situation to develop in which the bank's records continued to show the amount of the increasing indebtedness by her. We agree that that does make this case rather different from most other cases of this kind. But it is still a case of theft and it still has the mark of opprobrium which theft brings with it. The case is certainly not of the heinousness of Birch or of many others but the fact that that is so does not of itself mean that the case is not of great seriousness. The moneys that were obtained were used for the benefit of the applicant and her family. It is true that she did not use the proceeds for gambling or any other purpose of that kind. She did what she did in order to maintain the standard that the family had enjoyed up to the time her husband was affected by the drop in the substantial number of hours work each week which were available to him. The applicant did what she did to assist the family to overcome what she thought would be a temporary financial problem, but which, as so often happens, turned into something far more serious.
In the light of all that his Honour said in his judgment about the mitigating circumstances and the very real concern he had about the position the family would be in if the applicant suffered a term of imprisonment, it seems difficult on this ground alone to take the view that because of the circumstances mentioned by counsel, his discretion miscarried.
So far as the second point is concerned, we do not think that the error suggested by counsel is shown to have been made. We have referred earlier to the fact that his Honour said that, of the total of $191,000, $110,000 had been repaid. He then said that he had been told that the balance had been secured by a mortgage over the family home. In those circumstances, we do not think it could be correct to say, as counsel has suggested, that the Judge thought that there had been only partial restitution of the moneys that had been misappropriated. He mentions the mortgage and does not suggest that there is any question about the ultimate recoverability of the money which was secured as a consequence of the applicant's defalcation.

The third submission is sound factually. There is no mention in his Honour's remarks of the forfeiture of the sum of approximately $82,000 by the applicant from her superannuation entitlement. The matter does not appear in what his Honour said. But evidence of that matter was before him. It is clear that he gave the whole matter most careful consideration and we would not be prepared to infer that the Judge did not have the matter in mind when he gave his judgment.
Having read his Honour's judgment as a whole and given it due consideration, we feel great difficulty in coming to the conclusion that his Honour's discretion in any way miscarried; cfLowndes v The Queen (1999) 195 CLR 665 (at 671 ‑ 672). We can well understand his Honour's anxiety about sending a mother of two children for whom she is the carer to prison even for the period of eight months or so which will, in fact, be involved in the present case if the applicant is released on parole at the earliest possible date. But the authorities make it clear that offences of this kind, although they may vary in degrees of criminality, must usually be visited with a term of immediate imprisonment. Otherwise, there will simply be no deterrent. It is common place, as is pointed out in the authorities to which we have referred, that offences of this kind are more often than not committed by people with an unblemished record, who are most unlikely ever to offend again. But a person in a position of trust, which the applicant here was, and who abuses that trust, must be seen to receive adequate punishment. The sentence which was imposed is less than would ordinarily be imposed even in a case involving similar circumstances. Many parents have stolen in order to support their families. This is a sad state of affairs, but it does not mean that crime of this kind must go without adequate punishment.
In the run of the argument, there was discussion as to whether it would be appropriate to suspend the sentence which was imposed, provided that the sentence imposed by his Honour were increased, say, to four years imprisonment rather than two years. Certainly, if we were to consider a suspended sentence, that issue would require attention. We have reflected on whether such a course would be appropriate. But when we read his Honour's very careful consideration of the matter and his statement of his own anxiety about the applicant's difficult position and the welfare of her family, and at the same time take into account the seriousness of the offences which she committed, we find it very difficult to find any basis on which we can say that his Honour's discretion miscarried, either generally or in his decision not to suspend the sentences, or that there is any error at all in the conclusion at which he arrived.
In the circumstances, we grant leave to appeal against the sentence, but dismiss the appeal.