Director of Public Prosecutions v Avery
[2009] TASSC 27
•1 May 2009
[2009] TASSC 27
CITATION: Director of Public Prosecutions v Avery [2009] TASSC 27
PARTIES: DIRECTOR OF PUBLIC PROSECUTIONS
v
AVERY, John William
TITLE OF COURT: COURT OF CRIMINAL APPEAL (TAS)
JURISDICTION: APPELLATE
FILE NO/S: 825/2009
DELIVERED ON: 1 May 2009
DELIVERED AT: Hobart
HEARING DATE: 12 March 2009
JUDGMENT OF: Slicer, Blow and Tennent JJ
CATCHWORDS:
Criminal Law – Procedure – Reparation orders – Tasmania – Loss as a result of an offence – Clients' money stolen by solicitor, but clients not billed by proprietor of legal practice – Whether loss suffered.
Sentencing Act 1997 (Tas), s68(1).
Aust Dig Criminal Law [3218]
Criminal Law – Sentence – Relevant factors – Gravity of offence – Stealing of clients' money by solicitor.
R v Cole, unreported, 10 May 1974, referred to.
Aust Dig Criminal Law [3249]
REPRESENTATION:
Counsel:
Appellant: T J Ellis SC
Respondent: D J Gunson SC
Solicitors:
Appellant: Director of Public Prosecutions
Respondent: Gunson Williams
Judgment Number: [2009] TASSC 27
Number of paragraphs: 108
Serial No 27/2009
File No 825/2009
DIRECTOR OF PUBLIC PROSECUTIONS v JOHN WILLIAM AVERY
REASONS FOR JUDGMENT COURT OF CRIMINAL APPEAL
SLICER J (Dissenting)
BLOW J
TENNENT J
1 May 2009
Orders of the Court
The appeal is allowed.
The sentence of 4 years 6 months' imprisonment and the order for a non-parole period of 2 years 3 months are quashed.
In lieu of those orders, the respondent is sentenced to 6 years' imprisonment, with effect from 3 September 2008, and it is ordered that he not be eligible for parole until he has served 4 years of that sentence.
The respondent is ordered to pay compensation to the victims named in the following counts on the indictment,
(a)as to count 90, in the sum of $2,679.80; and
(b)as to counts 3, 5 – 33, 35 – 40, 42 – 53, 55 – 89, 91 – 112, 114 – 117, 119 – 129, and 131 – 133, all inclusive, in the amount specified in each such count.
Serial No 27/2009
File No 825/2009
DIRECTOR OF PUBLIC PROSECUTIONS v JOHN WILLIAM AVERY
REASONS FOR JUDGMENT COURT OF CRIMINAL APPEAL
SLICER J
1 May 2009
The respondent, John William Avery, a legal practitioner, was convicted on his plea to 129 counts of stealing and one of misappropriation as a company officer. The pleas acknowledged misappropriation of $512,218, little of which had been repaid. Whilst there remained a suggestion that larger sums were involved in the course of criminal conduct, he was to be sentenced on what was alleged and pleaded to (De Simoni (1981) 147 CLR 383). The course of conduct commenced in May 2000 and concluded, upon detection, in April 2006. The respondent was sentenced to four years and six months' imprisonment, with a minimum non-parole period. The Director of Public Prosecutions has appealed both the sentence and the claimed failure by the learned sentencing judge to make certain compensation orders sought in accordance with the Sentencing Act 1997 ("the Act"), s68.
Factual circumstances
The respondent was the senior partner in the legal firm Avery Partners. The firm operated a legal practitioner corporation Taslaw Pty ("Taslaw"). It maintained a trust account, but client disbursements and the firm's expenses were administered through two distinct bank accounts controlled by Taslaw. Avery was a signatory to both the firm and corporate banking accounts.
The firm used a computer system to record transactions, permitting the use of manual issue of receipts and cheques, later entered into the computerised system. The system was supervised by two financial managers who "job shared". Avery adopted as a vehicle the removal of cheque forms from the computerised system which he would complete manually, leaving the details on the cheque butt which would be later processed.
During the mandatory Trust Account audit for 2002 – 2003, discrepancies concerning the number of "cash cheques" created, led to the requirement for better supporting documentation. In mid-2005, one of the financial managers became concerned about the high level of Avery's personal debt and his means of servicing it. In February 2006, her suspicions were heightened by the number of cash advances drawn against the "out of pockets" account which, in turn, affected the firm's capacity to meet the GST requirements. She noticed a pattern of transactions, and her concerns were heightened by the creation of a new personal account "The Avery Gallery", opened with a significant deposit of a cheque from Tasmanian Permanent Trustees. The manager advised another firm partner of her concerns and, in April, the two commenced a detailed examination of the varying accounts. Legal advice was obtained, and a complaint made to the Law Society of Tasmania. On 1 May this Court suspended Avery's right to practice.
The Law Society appointed an investigating accountant and following a report to the Director of Public Prosecutions in accordance with the Legal Profession Act 1993, s92, police were notified and an investigation commenced. On 17 May, Avery was struck from the roll of practitioners. He was interviewed by police on 15 June and 8 November 2006, during which he made limited admissions. He claimed that "no client was out of pocket and the funds taken were predominately for fees due to the firm that were never billed". In relation to that statement taken from the prosecution's statement of facts and relevant to the s68 ground of appeal, is the concession added to it: "The Crown's position is that may be true in some cases, but not all."
Avery was arrested on 15 June and appeared in the Court of Petty Sessions at Hobart on 29 November 2006, entering a plea of not guilty to a single complaint alleging the theft of $724,368. The Director conducted further investigations, but could not claim them to be "definitive". The indictment alleging 134 counts was filed on 16 November 2007. There followed discussions between counsel and the Director, and eventually pleas were entered to the matters which are the subject of this appeal. The pleas were to the indictment as framed and were admissions of dishonest conduct.
The indictment shows a course of conduct of regular defalcations of varying amounts ranging from $100 to over $14,000. There were defalcations, single or multiple, in almost every month between May 2000 and April 2006. The learned sentencing judge found that in relation to the 130 counts pleaded:
"Count 1 contains a charge of misappropriation as a company officer and the other 129 counts to which he pleaded guilty charged him with stealing.
He carried out far more dishonest transactions than the number of charges might indicate. For example, count 1 has 46 particulars, and in fact involves about 49 cheques he fraudulently drew on his legal firm's bank account on various dates between January 2003 and March 2006. The 129 counts of stealing involve approximately 235 thefts of money between May 2000 and April 2006. They came to an end when his wrongdoing was detected by a financial manager at his legal firm in conjunction with his partner.
I was told that the total amount of his misappropriations and thefts was $512,218.78."
Prosecution statement
The prosecution relied on the elements of breach of trust by a legal practitioner, course of conduct over a prolonged time, complexity of method, theft for personal gain, the effect on victims, and his indifference to their plight, absence of restitution, and limited co-operation, as relevant matters. The offender was entitled to the utilitarian benefit of his plea but not that of an early plea. The investigation had been time- and resource-consuming. Victim impact statements, presumably representative of others, showed the harm caused to others. The diary notes, tendered on the sentencing hearing, show self-interest and absorption and the calculations necessary to maintain deception and avoid discovery.
Mitigation
Many mitigating matters were advanced, mainly uncontradicted. Avery, aged 60, had a long and distinguished career within the discipline of law. He had well served the community. His reputation was enhanced by his willingness to help the troubled and disadvantaged. He was a hard and assiduous worker. Many fine testimonials as to his general character from representatives of the community were provided to the Court, although character was subsumed by his lengthy course of criminal conduct (see Ryan v R (2001) 206 CLR 267). His disbarment, punishment through public exposure, and loss of income were relevant to sentence (Scott v R [1986] TASSC 81; Reid [1984] TASSC 57; R v Daniels (1998) 8 Tas R 397). His loss of social position and status were offset by his breaches of trust (Daniels (supra)). The character and history of "white collar" offenders has traditionally been accepted as a cogent basis for mitigation (R v De Stefano [2003] VSC 68; DPP v Bulfin (1998) 4 VR 114; R v Adler (2005) 53 ACSR 471 at [41]; Australian Securities and Investments Commission v Vizard (2005) FCR 57 at [63]). Allowance is not without its critics (see The use of character and reputation in sentencing white collar criminals: the ultimate contradiction?, Ivan Rubenstein, 2006, 24 C & S LJ 24; Frieberg, Sentencing White-Collar Criminals, Paper, 24 August 2000, 7 – 11, Rubenstein n91.3). But, despite academic criticisms, it remains a significant factor in the sentencing process.
Comparison
While consistency and standardisation of sentences remain desirable goals, their principled application is more problematic in practice. Comparable sentences are elusive for the reasons stated by Nettlefold J in Reynolds [1974] TASSC 46. General comparison by an appellate court permits examination of a range, provided that no mathematical equation or recourse to a limited number of cases is attempted or accepted as definitive (Berry [1968] TASSC 90; Cairns [1975] TASSC 64; and R v Franklin [1991] Tas R 54). The Court's sentencing database (see Professor Warner, Sentencing in Tasmania, 2 ed, 2.238) is useful, but not determinative. Here the Director urges the Court to pay regard to cases involving dishonesty by legal practitioners. He referred the Court to the sentences imposed on Lyon (23 July 1990, 4 years' imprisonment backdated to 24 April, 1990), Holmes (19 December 1996, 12 months' imprisonment suspended), McDonald (4 July 2001, 2 years 3 months' imprisonment, 15 months suspended), Fulton (13 December 2001, 2 years 6 months' imprisonment, 16 months suspended), Williams (4 July 2003, 6 years 6 months' imprisonment), McCulloch and Barron (14 November 2007, 18 months' imprisonment, 6 months suspended respectively) and Shirley (30 May 2008, 3 years 6 months' imprisonment, 2 years non-parole). Those disparate sentences illustrate the dangers of direct comparison. The amounts differed, which, whilst relevant, might have reflected opportunity or lack thereof. None had previous convictions and each had been respected in their discipline. The suggestion here is only that the conduct of the respondent ought be regarded as warranting a sanction towards the higher end of the scale. In turn, that posits the question asked by Nettlefold J in Reynolds as to whether there is ever a comparable sentence for a legal practitioner. Examination of cases of stealing involving accountants or financial managers (Franklin (supra)); Room (25 August 1987, 8 years' imprisonment); Saunders ([2000] TASSC 22, 3 years 9 months' imprisonment), Badger ([1997] TASSC 27, 6 years' imprisonment), Murray (25 April 1997, 4 years 6 months' imprisonment), Litchfield (25 January 1998, 4 years' imprisonment); those engaged in business (Durovic (12 December 1993, 8 years 6 months' imprisonment), Feldmanis (30 June 1983, 4 years' imprisonment), Prettyman ([1987] TASSC 34, 5 years' imprisonment); and public servants, Braslin (21 September 1999, 4 years 6 months' imprisonment), Brown (13 November 1995, 4 years 6 months' imprisonment), Lansdell (11 April 2000, a bank teller who received 3 years' imprisonment for the theft of $200,000), might provide assistance, but such ought not govern this determination. It may be that the higher the fall adds weight to the mitigating allowance. As the learned sentencing judge here observed, "His fall has been a considerable one".
Comparison with high profile corporate offenders elsewhere in Australia illustrates the problem of comparison. The weight given to character and previous community service suggests that the sentencing regime in Tasmania is at least not unduly light (R v Williams (2005) 152 A Crim R 548 — HIH Holdings, profit overstatement $92.4m, 4 years 6 months' imprisonment; R v Rivkin (2003) 198 ALR 400 — insider trading, nine months' periodic detention and a $30,000 fine, upheld on appeal (2004) 59 NSWLR 284; R v Adler (supra), HIH Holdings; Vizard (supra) insider trading, $390,000 fine and disqualification as a director for 10 years).
The question of punishment of legal practitioners might also involve public perception. It expects those within our discipline to act with integrity. We occupy a privileged and exclusive position, trusted with confidences and finances alike (Scott [1986] TASSC 81). Privilege is accompanied by responsibility. Loss of the right to practice, correctly a factor in sentencing, should not be unnecessarily elevated over other occupations or, at least, offset by the betrayal of a deeper trust. Here, comparison is of little use except in consideration of the issue stated in Cranssen v The King (1936) 55 CLR 509 of whether the sentence itself manifests error.
State appeals
The principles governing appellate review at the behest of the State are clear (Griffiths v R (1977) 137 CLR 293; DPP v O'Dwyer [2009] TASSC 13) and require no restatement.
The amendment to the Code altering the requirement for the State to first obtain leave, does not equate State appeals with those by a person sentenced. In this jurisdiction, State appeals based solely on the ground of manifest inadequacy are not infrequent. An incomplete survey of appeals brought by the Director between 2004 and 2009 shows some 11 appeals against sentence and one against orders made under mental health legislation. The majority of those appeals involved the ground of inadequacy. That "decreased rarity" is to be found in most Australian jurisdictions, despite the obiter of Barwick CJ and Murphy J in Griffiths (supra), and irrespective of whether the relevant statute requires "leave" or "as of right" (Criminal Appeal Act 1907 (UK); Criminal Appeal Act 1912 (NSW)). Some consider the increase to be a product of the political demands for "law and order" commencing in New South Wales in the 1970s, an increased level of crime in the era, or the complexities required of State legal officers in responding to media and claims by victims (see generally, Law Society Journal, April 2008, Thomson at 26 – 27). In this jurisdiction, those societal responses or pressures are reflected in statute (the Act, Pt9, ss17, 81A; the Corrections Act 1997; the repeal of the Parole Act 1975 by Act No 51 of 1997, Sch3, and the repeal of the Penalties Remission Act 1934). However, the use of the ground of manifest inadequacy is not without difficulty. Appeal on the basis of principle such as inconsistency or disparity, statutory contravention, prevalence, outside the range, failure to observe a guideline, judgment, and the like, can be more readily identified and dealt with by an appellate court. Likewise, when the State seeks an increment of the permitted range as a response to community expectations. If it is shown that a particular sentencing standard is too low or that prevalence requires adjustment, the standard ought only be raised gradually and after due warning (R v Barber (1976) 14 SASR 388; Poyner v R (1986) 66 ALR 264) although this is not a fixed principle (Devine (1993) 2 Tas R 458). Here if it is accepted that the penalties imposed on legal practitioners are generally inadequate, a significant increase in this respondent's sentence as a matter of general principle, without notice, would be inappropriate. But mere "inadequacy" is more problematic. Parliaments have altered the definitional basis for culpability or elements of criminal conduct in diverse areas such as rape, environmental or regulatory offences, manslaughter, forms of robbery or corporate fraud, drugs and the like. In turn, those changes have impacted on adequacy and comparison. The State, as custodian of community expectation and public interest, has an obligation to represent those interests by appellate review. But response ought be clearly articulated and measured, and reflect informed public opinion.
Sentencing trends within Tasmania have been relatively consistent over the period 1978 – 2006 (Sentencing Final Report No 11, Tas Law Reform Institute, June 2008, 1.2.2, Table 1 and Appendix A), showing an increase in the median sentence for some sexual crimes and a slight decrease in drug related matters. There is relative consistency between judges of this Court (Sentencing Final Report No 11, 1.2.12, Figure 5).
The above suggests that the need for appellate review generally at the behest of the State is not readily apparent. The Director might suggest that it is a result of State intervention, a matter which will be later considered. Independent of that there remains good reason for the State to be constrained in its attempts of appellate redress (Skinner v The King (1913) 16 CLR 336). In some jurisdictions there has been an additional principle of "double jeopardy" to constrain prosecution appeals (R Tate and Bartley (1979) 24 ALR 473) which, in my opinion is an incorrect recourse to a different principle (Hayes (1987) 29 A Crim R 452).
Sentencing and crime levels
The Institute (supra) reports in Part 2 at 23:
"Recorded crime in Tasmania
2.1.8 Recorded crime statistics in Tasmania for the last 25 years suggest a general increase in crime until 1997-98 followed by a decrease until 2005, with the crime rate increasing slightly in 2005-06. The crime rate is now lower than it was 10 years ago but higher than it was 20 years ago."
The report notes that there has been a general downward trend in offences against property, but an increase for offences against the person. That trend might also reflect, in part, the need for criminal proceedings to punish or exact retribution for historic family-related sexual crimes.
In apparent contradiction of the above report lies the statistical data of actual imprisonments or, at least, the length of those sentences. Paradoxically the present prison population has increased as the reported crime level throughout Australia has decreased. In part, that might reflect an increase in acts of violence against the person, but with a slight decrease in Tasmania between 2007 and 2008 (Prisoners in Australia, Australian Bureau of Statistics 4517, December 2008). However, the Bureau reports, at 5, that in the 10 year period from 1998 "Tasmania recorded the largest percentage change in the imprisonment rate, rising 51% (from 90 prisoners per 100,000 adult population in 1998 to 136 prisoners per 100,000 adult population in 2008)" and "From a low base in 1998, Tasmania recorded the highest proportional increase in the female imprisonment rate, an increase of 218%. The imprisonment rate increased from 7 to 23 per 100,000 Tasmanian adult female population". Recidivism attracting a longer term, personal and sexual violence and drug-related crime provide some explanation for the increase, although as of the census count of 2008, 173 of the 515 prisoners had not been previously imprisoned. Alteration to parole and remission provisions has doubtless impacted on the statistics. The Court sentencing database accords with the above. Figures of penalties imposed for the years 1991 – 2008, show a marked increase in sentencing dispositions:
Year
Total Comments on Passing Sentence
1991 257 1992 295 1993 182 1994 277 1995 250 1996 268 1997 250 1998 390 1999 494 2000 466 2001 310 2002 440 2003 396 2004 435 2005 335 2006 400 2007 400 2008 481
The increase from 1998 to 2000 represents the inclusion of cases of household burglary, many of which are now dealt with in the magistrates court.
Prison statistics can be examined on the basis of the number of admissions and discharges in a given year or those in custody at a particular time. Different reporting and recording systems are used at differing periods. I have chosen a mixture, but rely primarily on daily average or yearly comparison figures as a simple form of analysis.
In the period 1889 – 1900, the daily average of persons imprisoned was 108, representing 62.53 per 100,000 of the population. In the year 1970 – 1971, the figure was 414, the highest figure since the ending of transportation in the early 1850s. In the year 1988 – 1989, the prison population ratio was 69.6 per 100,000.
Between 1963 and 1973, the prison population (daily average) had steadily increased from 238 to 381. There was a plateau followed by a decrease from the mid-300s to the low 200s, between 1974 and 1982. The recording method alters in the 1990s, comparing capacity with occupancy, but the figure for 1998 shows a daily average of 269. (See generally Tasmanian Year Books for the respective periods.)
In 2008, the prison records show 719 commencements of sentence for inmates.
There are many complex reasons for changes in prison populations. But there ought be no suggestion that the sentence outcomes provided by the courts show diminution in frequency or length of custodial orders. "Manifest inadequacy" is not demonstrated as a policy problem.
There has been a significant increase in the prison population since 1998. Figures prepared by the Australian Bureau of Statistics (Prisoners in Australia (supra)), show the daily rate as:
"tasmania
Number Median
AgeFemale Indigenous Known Prior Imprisonment Remandees 1998 314 30.9 4.1 8.9 56.1 18.5 1999 343 31.2 5.5 10.5 60.1 11.7 2000 390 31.0 5.1 10.0 57.7 20.5 2001 346 32.2 5.8 11.6 62.7 21.4 2002 427 31.9 7.0 14.3 60.7 20.8 2003 453 33.5 5.3 11.7 58.7 21.6 2004 447 34.0 4.9 13.2 67.8 15.2 2005 551 34.6 5.1 12.7 65.3 23.8 2006 512 34.9 7.4 10.4 66.8 24.8 2007 528 35.0 6.1 12.7 63.4 23.9 2008
515
35.8
8.5
12.6
66.4
20.8"
The figures show a daily average rate of approximately 100 per 100,000, a significant increase over previous years. The reception figures suggest a higher figure.
The prison recording system, based on data "prisoners sentenced by Year" show a similar trend:
"2000 661 2001 755 2002 773 2003 684 2004 801 2005 752 2006 797 2007 744 2008
719"
In the year to 31 March 2009, 151 prisoners have been sentenced and received into the prison system.
Those figures show a higher recidivist rate and an increase in the mean age from 30.9 to 35.8. They suggest both increases in frequency and length of sentences. The sentencing discourse might need to be less about "inadequacy" and more about recidivism.
The above suggests there has been little idiosyncratic approaches by judges of this Court and that imprisonment rates have increased both in number and length. The statistics do not suggest a gradual diminution, nor support a claim of general manifested inadequacy. The Director contends that a "benchmark" sentence in Lyon shows subsequent sentences to be unduly lenient. The overall picture does not support a process of diminution.
The publication, Australian crime: facts & figures 2008, Australian Institute of Criminology, ISBN 1836-2249, Ch1, Figure I, shows variable trends in selected crimes of violence between 2002 – 2007, but marked consistent decreases in property crimes generally during the period 1996 – 2007, with a significant decrease of 30 per cent in "other theft" crimes between 2001 and 2007 (Figures 2, 3 and 4). The same publication (Ch5, Figure 78), shows "deception and theft" to be least likely to incur custodial sentences. The ratio of higher levels of imprisonment and decreased levels of crime is not a simplistic exercise and is belied by varying rates of imprisonment for varying crimes, but with a consistent upward trend in the levels of imprisonment. When tested against prevalence, consistency or public utility, any claim of "manifest inadequacy" is elusive in definition.
Manifest inadequacy
The sole ground of appeal is that the sentence was manifestly inadequate. No error is claimed by reason of inadequate comparison, "outside the range", or that legal practitioners are unfairly advantaged by this Court in its sentencing practice or policy. Instead, the Director has provided the Court with details of sentences imposed on legal practitioners over a number of years. They do not show an "in line" sentence, nor a gross or significant departure from a recognised pattern of sentencing (R v Graham [1979] TASSC 18). My own analysis suggests that public officers or financial advisers receive sentences comparable to legal practitioners which could raise a perception of difference in that higher standards are required of a practitioner. It may be that here the sentence imposed was lenient. But it reflected the plea of guilty, the likely complexity of a trial (Pavlic v R (1995) 5 Tas R 186), and the utilitarian benefit, past service by the offender for his community, potential recourse to assets claimed by Avery to be valuable and which remained in the possession of the legal corporation, and the admission that while fraud had been committed, at least some of the money represented unbilled fees, and the disbarment from practice.
The ground of manifest inadequacy requires that the sentence itself affords convincing evidence that the exercise of discretion has been unsound (House v The King (1936) 55 CLR 499; Cranssen v The King (supra); Zsebe-Takacs v R [1960] TASSC 51; Hardy v R [1980] TASSC 8; Devine v R (supra); R v O'Brien [1987] TASSC 43). Here the Director contends that the appropriate sentence ought be one of five years' imprisonment with a three year non-parole period. But what is the manifest error if the difference in the head sentence be that of six months? A statutory minimum non-parole period does not mean that it will be granted automatically. The problem inherent in the approach suggested remains that posed by Nettlefold J in Reynolds, namely, what is the "comparable sentence"?
The respondent was entitled to the benefit of his plea, and the mitigating matters advanced on his behalf. Those matters included assertions that significant funds related to work performed and not billed. The appellant did not challenge those assertions and require a "disputed facts" hearing. The learned sentencing judge was required to pay regard to those matters until challenge (Thompson v R [1973] Tas SR 78; Smith v R [1979] TASSC 48; R v Olbrich (1999) 199 CLR 270). Whilst the Act, s81(1), permits the Court to receive information as it thinks fit and is not bound by the rules of evidence in that reception, there remains an obligation for the mitigating matters raised by the defence to be placed in issue, either by the prosecuting counsel or the sentencing judicial officer. Here the offender challenged the proposition that the losses all lay with the complainants and, inferentially, challenged portion of the prosecution's averments. In doing so, the Court was required to give regard to the Act, s81(4), upon challenge by the opponent. The discount for the plea was affected by the fact that on trial the evidentiary requirements would have been considerable. The amount pleaded to was considerable, although in the case of Williams, the sum of $3.7m was misappropriated and a loss to clients of $1.18m identified. Here the actual loss said to have been suffered by clients was in dispute and, absent resolution, required the learned sentencing judge to respond accordingly. The State did not seek to call evidence or provide material contesting the matters asserted by counsel. A separate matter raised by counsel was that the loss suffered by the firm and the legal corporation was lessened by recourse to undistributed earnings for work in progress or completed, and the retention of valuable items such as artworks was not disputed by the State. Absent contest or a disputed facts hearing, the learned sentencing judge was required to take those matters into account. Punishment for a crime of this nature ought reflect both the dishonesty of the perpetrator and the harm caused. The appellant has not shown the sentence to be manifestly inadequate.
I would dismiss the appeal against sentence.
Compensation
The grounds of appeal relevantly claim:
"2His Honour erred in law in failing to find that the persons named in the Indictment had suffered loss as a result of the stealing committed upon them, in the amounts agreed by the Respondent by his plea to have been stolen from them.
3His Honour erred in fact and in law in holding or finding that the possibility of the Respondent or his firm being able to legitimately render an account in some undefined sum to the persons from whom he stole money meant that they had not suffered loss as a result of the offence.
4His Honour erred in fact and in law in holding that any consideration other than the actual repayment of money stolen was relevant to the making of orders as required by Section 68(1)(a) of the Sentencing Act 1997 when there was no issue thereby raised as to the quantum of loss as a result of the offence."
The grounds differ. Ground 2, as formulated, could not succeed in principle. The amount or item stated in an indictment does not necessarily establish a right to compensation. Nor does the plea acknowledge anything other than the theft or taking. There may have been return to the owner or restitution made. Here the facts establish that little money has been repaid. But there was no acknowledgement that, without more, the complainant named in each count in fact suffered loss. The plea in some instances included a claim that, although not entitled, the money taken represented or included money due to the firm and, if such be the case, the loss was suffered by the offender's legal partner. Ground 4 incorrectly states that no issue was raised "as to the quantum of loss as a result of the offence". The issue was raised as to whether the named complainant, rather than the firm, had suffered the loss. The example of Williams (supra) illustrates the point. The amount stolen in Williams stated in the indictment was $3,764,687. Some of that money had been misappropriated from one client's account to pay another. The loss actually suffered was said to be $1.18m. On the Director's argument, civil judgments ought to have been entered in favour of each client for the sum alleged. That person would, in law, be entitled to enforce the judgment. It is no answer to say that the State would not countenance abuse of process. Once made, the compensation order is one in favour of the named complainant, not the State. The State itself could simply decide to let the offender attempt to redress the injustice. The amount specified in the indictment does not govern the quantum of the loss, nor necessarily its existence. The plea was to the crime alleged. An example can be seen in an examination of count 1 which contained 46 particulars involving 49 cheques. A plea to this Court does not necessarily mean acknowledgement of each sum or transaction. On the argument of the Director, the plea simpliciter would bind the terms of the compensation order.
The State elected to frame its indictment in separate counts, rather than the theft of an overall amount of general deficiency (Tuck v R [1999] TASSC 135). Some of the counts such as those involving Taslaw were susceptible to an easy identification of loss, but others remained problematic or contentious. As his Honour stated:
"It may be the case, but the evidence provided to the Court is inadequate to establish it, that in the end many clients did not finish out of pocket and that much of the loss suffered became the loss of Taslaw, in the form of fees that were never billed because he had already stolen the funds from the clients."
A simplistic exercise as suggested in the ground is not within the remit of the Act, s68. The earlier concession by the Director during the hearing, stated earlier in these reasons, that "The Crown's position is that it may be true in some cases but not all", was apposite.
The learned sentencing judge was alert to the difficulties posed by the application for the compensatory orders, as is shown in the following exchange with counsel:
"That I'm certainly not on top of the factual position as to who lost in all of this. I know you've made a submission about it didn't coincide with much or what Mr Ellis put to me and I'm not on top of the facts and I will have to re-read a lot of what has been said to me. Certainly it seemed to me that there was a – there were a significant – there was a significant number of transactions in which it was clients money that he stole, he advanced himself, if you like, out of trust monies, and you say that at the end he stole from his partner effectively to settle with a client. I think that's as I understand part of your submissions but I don't fully understand all this and you may address it –".
The reply by the Director to his opponent's submission of the s68 point did little to resolve his Honour's dilemma. The Director outlined the difficulties in preparing the case and the provisions of relevant material to the respondent. He stated his position in the following exchanges:
"mr ellis sc: If you make the order the loss has effect as a civil judgment, that's a judgment, that does not preclude Tas Law Limited or Mr Avery from making a claim in that case for the value of the services.
his honour: In other words you're only rendering an account.
mr ellis sc: Mmm.
his honour: It's required by law I think.
mr ellis sc: Yeah, that's right. It was never his money to take until he'd rendered an account, that's why the Legal Profession Act rules are set up. Now whether Mr Blissenden, as (indistinct words) would actually do that is quite a separate matter. But if the Court is going to shy away from making s68 orders in clear cases of theft when – it begs the question when will it make an order because all that's been raised now is setoff or perhaps counterclaim or a quantum meruit claim for services later rendered that is in my submission not a legitimate way to avoid the consequence in a compensation order following a civil theft."
and later summarised that position:
"Mr Avery took these amounts from people, they suffered that loss. Whether they were ultimately somehow better off is certainly not something this court or any other court should enter into and it's such a clearly unmeritorious argument in my submission that the court should not count on it now as a basis not to apply, what Parliament has said ought to be applied in a case of stealing must be applied, a compensation order.
To go through each and everyone of these counts minutely would be ridiculous when Parliament has provided a summary way to what after all is only a civil judgment against Mr Avery, a civil judgment, and if he has remedies against people by way of quantum meruit or if he has remedies against his partner well let him pursue that but he shouldn't pursue in my submission against the very people he stole from, who he has admitted stealing from in this court in hundreds of instances. It makes the law a mockery to say because his fanciful idea of somehow adjusting the bills in his mind, because there's certainly not a note to it, there's never a proper accounting, should stop this Court making compensation orders against him.
It is conceded that there was a repayment, and this has been done by letter, and I think my learned friend has mentioned others that he's never raised with me and so that's disputed, a repayment in the case of count 90 of three thousand nine hundred and fifteen dollars, which isn't the whole amount of the account – ".
The problem inherent to the application is shown in the following:
"mr ellis sc: 118, your Honour. It was said as to that count that sixteen thousand six hundred and forty eight dollars was reimbursed back that it may have been to the other beneficiary and executor but the count of stealing, to which Mr Avery pleaded guilty, the count of stealing had already taken that into account so it’s not an additional reimbursement.
his honour: Right.
mr ellis sc: That should come off the amount there shown and pleaded to as having been stolen. Thank you, they are the matters that I wanted to respond to, your Honour."
There followed a brief adjournment to enable counsel to resolve the disputed count 118, following which Mr Gunson SC advised the Court:
"mr gunson sc: Thank you, your Honour. Your Honour, Mr Ellis and I have had some discussions it is agreed on count 41 involving Kevin Bell that the sum of two thousand one hundred and twenty five dollars has been repaid –
…
mr gunson sc: Count 118 that sixteen thousand six hundred and forty eight dollars was repaid to Dr Simpson. With respect to count 113 which involves the estate of Anne Green Mr Ellis and I hope to be able to send you within probably forty eight hours or thereabouts a letter stipulating what the position is and if I could just say this to your Honour."
The outcome was unsatisfactory. The learned sentencing judge was required, unaided, to consider each claim separately. He made orders:
(1)granting the application in respect of some counts;
(2)refusing it in others; and
(3)expressing himself unable to make findings in relation to the remaining.
I agree with his Honour's approach and disposition, except in one respect, which might be based on my misunderstanding of what he intended. He stated his reasoning in the following terms:
"I will also explain later why I have concluded that I am unable to make findings of precise losses suffered by complainants with regard to most of the counts of stealing, to the extent that I refuse to make compensation orders except with regard to a small number of counts.
…
For all of the charges of stealing, which means all except the first count, the Sentencing Act, s68(1)(a), is imperative in its terms. It provides that if a person has suffered loss or damage as a result of a crime, of a particular kind, the Court 'must order the offender to pay compensation for that loss or damage'. The Acts Interpretation Act 1931, s10A(a), explains that the use of the word 'must' is to be construed as being mandatory. It follows that on the stealing counts, if the Court finds that a person has suffered loss or damage as a result of the crimes, it must order the accused to pay compensation for that loss or damage. However, if the Court cannot make a finding as to the amount of the loss or damage, then it is obvious that it is prevented from making an order. Section 68(6) touches on that aspect in its statement that a Court may exercise its powers under the section if the facts sufficiently appear from the evidence or material presented to the Court, or the other material referred to in the subsection."
My own practice has been where loss has been established but the amount unquantified, to order compensation in an amount to be assessed. I have regarded the exercise afforded by s68 to be mandatory in its primary operation, but discretionary in its specific exercise or assessment. Subsection (6) enlarges the scope of an exercise of discretion if evidence permits an inferential finding. Where loss is established, the Court is permitted to adjourn future assessment. The original application ought be made as soon as practicable (s68(4); Monks [2001] TASSC 41). The Court is afforded wide powers in its reception of material (s68(9)) and determination. There is no time limit for any adjourned assessment (see Australian Associated Motor Insurers Limited v Galvin [2005] TASSC 87).
The Act, s68, relevantly provides:
"68 Compensation order
(1) If a person is found guilty or convicted of an offence and the court finds that another person has suffered injury, loss, destruction or damage as a result of the offence, the court —
(a)must, if the offence is burglary, stealing or unlawfully injuring property; and
(b)may, in the case of any other offence —
order the offender to pay compensation for that injury, loss, destruction or damage.
…
(6) A court may exercise its powers under this section if the facts sufficiently appear from any evidence or material presented to the court, or from the available documents, together with admissions made by or on behalf of any person in connection with the proposed exercise of the powers."
Central to its application is the requirement that a person has suffered "loss … or damages as a result of the offence" (DaviesERROR! BOOKMARK NOT DEFINED. v Taylor (1997) 7 Tas R 265; Hookham v R (1994) 181 CLR 450). The Act does not confine a compensation order to the complainant. The date relevant to the operation of the order is the date of the application made under s68, and the amount assessed as of the date of the making of that order. It provides for the loss suffered by "another person" (Galvin (supra)). Section 65(5) does not require the Director, a complainant, or police prosecutor, to make an application on behalf of that "other person". It is the person who seeks the order, not the prosecutor who might make it on behalf of another, although not obliged to do so. Here it is not clear whether or not the Director had the authority of each complainant to make the application. The indictment does not necessarily identify the person who has suffered the loss. An applicant must be able to prove a causative link between the conduct and the loss or damage suffered. The test of causation is not based on foreseeability (Fitzpatrick v R (2004) 146 A Crim R 332 at pars36 – 38). I repeat my citation in Galvin (supra) from that case and adopt the interpretation of the comparable legislation taken by the Court of Criminal Appeal at par43:
"However, if an application for a compensation order in favour of a victim of the offence is made to a court sentencing an offender the court will have the power and the duty to consider any evidence which may be material to that application, whether in relation to issues of causation, quantum of loss or other factors which may, in the particular circumstances, be relevant to determine whether or not any loss established should be compensated in full or at all. The Judge who is required to assess compensation under s 117 should proceed by reference to the same principles as those which would apply in an action for damages for personal injury: R v Fraser [1975] 2 NSWLR 521 at 525 - 526 and R v McDonald [1979] 1 NSWLR 451 per Street CJ and Lee J. This approach will include the application of such rules as, by statute or otherwise, are currently applied in an ordinary common law action for damages, for example those relating to contributory negligence and mitigation of damages (Sentencing Act s 113). The rules of natural justice must be observed. This will include an obligation to ensure that the parties, and in particular the offender, have due notice of the intended application and a sufficient opportunity of being heard. The onus of establishing an entitlement to compensation will be upon the applicant, that is either the State or the victim, and, except where this is agreed there will need to be evidence to establish the identity of the victim, the causation of the loss and its extent as well as any other facts which may need to be established in the particular case. Where there is a real issue whether the person claiming compensation has suffered any loss or as to the amount of his or her loss, the Court may not make a compensation order based merely on the prosecutor's representations to the court, but must require evidence proving the amount claimed as compensation: R v Horsham Justices; Ex parte Richards [1985] 2 All ER 1114; [1985] 1 WLR 986 (1986) 82 Cr App R 254. Whether or not the hearing will involve the taking of further evidence will depend upon the circumstances of the case, but ordinarily the evidence given at the trial should be sufficient: R v Bowen (1969) 90 WN (Pt 1) (NSW) 82 at 83 and R v McDonald. The facts which need to be established to make an order for compensation must be established according to the civil standard of proof: s 114 of the Sentencing Act and R v Field [1982] 1 NSWLR 488."
A similar approach, although dependent on Commonwealth legislation providing for "reparation" was taken by Cox CJ in Davies v Taylor (supra), referring to R v McDonald [1979] 1 NSWLR 451 and R v Braham [1977] VR 104. The form of discretion was recognised by Gibbs J in Murphy v HF Trading Co Pty Ltd (1973) 47 ALJR 198 and by Brennan J in Hookham v R (supra) when he said at 456:
"That is not to say that a court, exercising its discretion under s 21B(1), will not inquire into the circumstances which have exposed the offender to liability to conviction. It is one thing to hold that a court has power to make a reparation order; it is another to determine how that power should be exercised."
Compensation
Professor Warner at 5.305 suggests that the wording of s68(6) might provide a statutory form of the "clear case" principle followed by the Victorian courts in (R v Braham (supra); Landolt (1992) 63 A Crim R 220), discussed in Galvin (supra). That principle or approach suggests that compensation orders be confined to "clear and single" cases and it is a proper exercise of discretion to refuse to make an order when complicated and extensive enquiry is necessary to ascertain causation, loss or its amount. In my view the question of quantum could have been met by an order "in a sum to be assessed" and the matter left to the parties or a further hearing. But the learned sentencing judge was first required to identify the "person" who had "suffered loss". That person could, and remains able, to make his or her own claim (the Act, s68(5)). Upon identification of that person, the learned sentencing judge could make an order whilst deferring the assessment. He was engaged in an exercise which by statute "is taken to be a judgment of [the Supreme] Court and [which] is enforceable under the Supreme Court Civil Procedure Act 1932" (the Act, s69(1)). But the question of causation could only be met by a general adjournment of the application. No ground of appeal claims refusal to grant an adjournment as an error.
The question of causation concerns its occurrence and that of loss or damage referable to the event or conduct giving rise to the application.
His Honour's approach can be summarised in the following:
(1)His Honour ordered that compensation be paid in the sums of $59,492.65 and $6,498.50, referable to counts 1 and 2 of the indictment. He regarded any set-off as too complex a question to be resolved "at this time".
(2)He found on counts 3 to 52 (excluding 4 and 34) that the money alleged had been stolen and that the "losses in the amounts stated were suffered at the time of the thefts".
(3)The amount stated in count 41 had been reimbursed by the respondent and the application refused.
(4)The defendant had submitted that in the other counts, 3 to 52, the legal services had been provided and the clients had suffered no loss or damage "as a result of his crimes". If that submission was upheld, it was Taslaw which had suffered the loss. His Honour decided that, given the dispute, he could not determine the matter on the information provided. He was correct to do so. Absent a "disputed facts hearing" he could not determine the matter. The Act, s68(6), does not provide answer. Alternate remedy was open to either the complainants or Taslaw.
(5)Counts 53 and 55 to 133 involved trust moneys. On the material provided, he was unable to determine "who has lost and in what amount". He was required to consider each potential claimant separately, an impossible task. I differ from the learned sentencing judge in relation to counts 61 and 62, the "Moore" matters. If he was correct in concluding that Moore had suffered loss, it was open to him to make a compensation order and adjourn assessment. It might have been possible to then determine the proportion of loss suffered by Moore and Taslaw, and make orders accordingly. He was, in relation to Moore, at least required to make an order.
(6)In relation to count 113, he found that, after restitution, the complainant had suffered a loss of $7,680.99 and ordered accordingly.
(7)Count 118 had been the subject of the exchange, earlier recounted, with counsel. As a consequence his Honour found that the "other beneficiary" had lost the sum of $6,834.45 and ordered accordingly.
(8)Count 130 resulted in no order being made by agreement between the parties.
The Director had adopted an "all or nothing" claim, and relied on the facts asserted during the hearing. Those assertions had been contested in part. The prosecution did not seek a "disputed facts hearing". The Act, s68(1) and (6), did not assist the learned sentencing judge. He could only act on the information provided. From that he was unable to determine the identity of "another person who ha(d) suffered loss … or damage".
Examination of some of the counts, chosen at random, and the accompanying statement of facts, illustrates the point:
"statement of crime
Seventh Count
stealing – Contrary to Section 234 of the Criminal Code.
particulars
john william avery at Hobart in Tasmania, in or about October 2001, stole $1,000.00, the property of [EM].
7 Stealing $1,000.00 from [ERM] in or about October 2001
In October 2001 [EM] paid to John Avery $1,000.00 on account of costs, in two instalments.
The money was taken by John Avery personally and not credited to the client in the firm's accounts, either to trust on account of costs or to billed costs.
Further Particulars
[EM] gave John William Avery $1,000.00 for him to deposit as a security for the costs of Avery Partners to stand to his credit against costs to be incurred. John William Avery took the money himself for his own use and did not deposit it or cause it to be credited against costs to be incurred by Avery Partners.
John Avery made a limited admission in interview on 8 November 2006."
It is not stated that no work was done, nor service provided. The amount expended by the firm for payments made as out of pockets or to "billed costs" is not identified. It may be that costs were "billed" as stated and the amount paid not credited against those billed costs. The statement does not establish loss to EM, the person named in the indictment.
"statement of crime
Ninth Count
stealing – Contrary to Section 234 of the Criminal Code.
particulars
john william avery at Hobart in Tasmania, on or about the 11th of October 2001, stole $550.00, the property of [RMF].
Further Particulars
[RMF] gave John William Avery $550.00 for him to deposit as a security for the costs of Avery Partners to stand to his [sic] credit against costs to be incurred. John William Avery took the money himself for his own use and did not deposit it or cause it to be credited against costs to be incurred by Avery Partners.
9 Stealing $550.00 from [RMF] on or about 11 October 2001
On 11 October 2001 [RMF], who was a client of John Avery, paid to John Avery $550.00 on account of costs.
The money was taken by John Avery personally and not credited to the client in the firm's accounts, either to trust on account of costs or to billed costs.
John Avery made no clear admission in interview."
It is likely that work was performed to at least this value and possible that a bill of costs was rendered. In either case it was not established that the client, as of the date of the s68 application, had suffered a loss.
"statement of crime
Twenty-Ninth Count
stealing – Contrary to Section 234 of the Criminal Code.
particulars
john william avery at Hobart in Tasmania, on or about the 27th of February 2004, stole $200.00, the property of [KJB].
29 Stealing $200.00 from [KJB] on or about 27 February 2004
On 27 February 2004 [KB] paid to John Avery $200.00 on account of costs.
The money was taken by John Avery personally and not credited to the client in the firm's accounts, either to trust on account of costs or to billed costs.
John Avery made a general admission in interview."
Further Particulars
[KJB] gave John William Avery $200.00 for him to deposit as a security for the costs of Avery Partners to stand to his credit against costs to be incurred. John William Avery took the money himself for his own use and did not deposit it or cause it to be credited against costs to be incurred by Avery Partners.
The amount and time between receipt and detection suggests that the loss was suffered by the respondent's partner or the legal corporation.
"statement of crime
Forty-First Count
stealing – Contrary to Section 234 of the Criminal Code.
particulars
john william avery at Hobart in Tasmania, in or about 2005, stole $2,125.00, the property of [KB].
Further Particulars
[KB] gave John William Avery $2,125.00 for him to deposit as a security for the costs of Avery Partners to stand to his credit against costs to be incurred. John William Avery took the money himself for his own use and did not deposit it or cause it to be credited against costs to be incurred by Avery Partners.
41 Stealing $2,125.00 from [KRB] in or about 2005
In or about 2005 [KRB], an inmate, gave John Avery $2,125.00 to make an application to revoke Mr [B]'s dangerous criminal declaration. John Avery did no work on the matter and stole the entire amount with depositing it in trust. He admitted this theft in interview on 15 June 2006.
Mr [B]'s trust account was reimbursed $2,125.00 in August 2006 on Mr Blissenden's instruction, and with John Avery's agreement, from an account of John Avery's which was in credit."
The amount was reimbursed.
"statement of crime
Forty-Third Count
stealing – Contrary to Section 234 of the Criminal Code.
particulars
john william avery at Hobart in Tasmania, in or between July to October 2005, stole $900.00, the property of [NJW].
Further Particulars
[NJW] gave John William Avery $900.00 for him to deposit as a security for the costs of Avery Partners to stand to his credit against costs to be incurred. John William Avery took the money himself for his own use and did not deposit it or cause it to be credited against costs to be incurred by Avery Partners.
43 Stealing $900.00 from [NJW] in and between July and October 2005
John Avery acted for [NW] in a Magistrates' Court matter. In July 2005 and October 2005 he gave John Avery two cash payments of $750.00 and $250.00 [sic] respectively on account of costs, but instead of paying the money to his firm's trust account to Mr [W]'s credit, John Avery kept the money himself.
John Avery made an admission on interview."
The statement of facts by the Crown shows the service to have been performed by Avery and the amount paid commensurate with an appearance in the magistrates court. It was the firm which suffered the loss. The consequence of the Director's position would be the entry of a civil judgment in favour of the complainant in a sum to which he was not entitled. Avery would be required to have the judgment set aside, plead quantum meruit or agreement, leaving the firm to join in the action, or sue Avery. The firm or partner could have availed itself or himself of the Act, s68, but no application was made.
Counts 61 and 62 have been separately considered.
Count 91 provides:
"statement of crime
Ninety-First Count
stealing – Contrary to Section 234 of the Criminal Code.
particulars
john william avery at Hobart in Tasmania, on or about the 8th of December 2003, stole $3,617.22, the property of [RWP].
Further Particulars
John William Avery, jointly with his partner or partners, received money on account of [RWP], and John William Avery dishonestly converted $3,617.22 to his own use.
91 Stealing $3,617.22 from [RWP] on or about 8 December 2003
Mr [P] gave John Avery instructions to settle his action by accepting an offer of $96,265.17, although whether this was plus or inclusive of costs was not absolutely clear to him. When he picked up his settlement cheque from John Avery's office, it was for $76,638.63, and a subsequent letter of 5 December 2003 said $10,000.00 was retained by Avery Partners for costs and $9,626.52 was paid to the Health Insurance Commission, leaving $76,638.63.
However, the ledger of Avery Partners reflects that only $6,382.90 was taken from the settlement to costs and on 8 December 2003 Mr [P] was provided with balance funds of $3,000.00 and $612.22 was paid to the Commonwealth Bank on his behalf. A (different) settlement statement and covering letter were attached to the Avery Partners' file.
A trace of the trust cheque No 111627 drawn on 8 December 2003 revealed it was paid to Clapham Nominees Pty Ltd. A trace of trust cheque No 111628 revealed it was paid to the credit card of Mrs L A Avery and Mrs M E Avery, John Avery's parents [sic].
In interview John Avery was not asked about the $617.22 payment. As to the $3,000.00, he said he had no recollection of that and would be surprised if it was a 'true misappropriation'."
The original sum of $96,265.17 was accounted for and costs retained. The examination of the ledger showed a costs entitlement limited to $6,382.90. The sum of $3,000 was paid to the client on 8 December 2003. On the Director's argument the client was entitled to a civil judgment for $3,617.33, $3,000 of which he had received. Avery would need to apply to set aside the judgment. There was insufficient evidence to establish that, in fact, the client had suffered loss.
"statement of crime
Ninety-Second Count
stealing – Contrary to Section 234 of the Criminal Code.
particulars
john william avery at Hobart in Tasmania, on or about the 22nd of December 2003, stole $1,591.53, the property of [MCW].
Further Particulars
John William Avery, jointly with his partner or partners, received money on account of [MCW], and John William Avery dishonestly converted $1,591.53 to his own use.
92 Stealing $1,591.53 from [MCW] on or about 22 December 2003
On 22 December 2003 a large sum of money was paid to Avery Partners' trust account as the settlement of [MCW]'s workers' compensation claim, in which John Avery had acted. On the same day John Avery caused a cheque to be issued for $1,591.53 which he falsely entered as (to) 'M [W] balance settlement funds'. In fact the cheque was deposited on 24 December 2003 to the Westpac Account of J W & A J Avery."
It would be impossible to find that the client had suffered loss. The client might have received the compensation sought and obtained, with the balance being "party/party costs" due to the firm. The argument that the money remained the property of the client until an account provided does not withstand argument. The identity of the person suffering loss or damage was not established by either the averment in the indictment or the statement of facts.
"statement of crime
One Hundred Eighth Count
stealing – Contrary to Section 234 of the Criminal Code.
particulars
john william avery at Hobart in Tasmania, on or about the 8th of November 2004, stole $798.40, the property of [TJR].
Further Particulars
John William Avery, jointly with his partner or partners, received money on account of [TJR], and John William Avery dishonestly converted $798.40 to his own use.
108 Stealing $798.40 from [TJR] on or about 8 November 2004
On 5 November 2004 Avery Partners received to trust an amount of money representing the settlement of [TR]'s claim for criminal injuries compensation. John Avery had acted in the matter.
On 8 November 2004 John Avery drew a cash cheque for $798.40 on the settlement sum and falsely entered it in the ledger as 'settlement funds'.
The cheque was cashed and the proceeds used by John Avery. Mr [R] was given no settlement statement.
John Avery made no admission."
The averment does not take into account the component which could be withheld for costs, and the loss incurred by the firm.
I have chosen the above at random and undertaken the analysis after that selection. The examples illustrate the dilemma posed to the learned sentencing judge.
The course followed by the learned sentencing judge was correct. The State did not seek to place material before the Court in support of its applications. It did not provide "facts sufficiently appear[ing] from any evidence or material … or from the available documents" to permit an exercise of power. The admission of criminal conduct by the entry of the plea did not establish "the facts sufficiently as required by the Act, s68(6)". Indeed any admission of loss was expressly disavowed by counsel and not challenged by the maker of the applications, except in the most general terms. The provisions of subs(9) do not save the Director's argument.
I would uphold the appeal, ground 2, only in relation to counts 61 and 62, the "Moore" matters. Ground 2 as formulated cannot succeed in principle, but I am satisfied that on the material provided to the Court, loss and causation were established. His Honour was then entitled to defer assessment.
Conclusion
There are contradictions in the positions advanced by the appellant in the criminal and civil elements of the case. In assessment of the criminal sanction, the Director claims inadequacy through comparison with other sentences which reflected the theft of money from an external source. Here the claim, at least, was that as a matter of fact, a significant portion of money was taken from funds to which the respondent had some entitlement through agreement, the provision of services, and work. In the civil aspect of the proceedings, the Director, not unlike Shylock, seeks recourse to the strict letter of the law lest it constitutes a "monstrous travesty". That strict letter is that failure to render an account makes the money that of the client. But money paid on account of costs after the service has been provided or paid by another in settlement of an action which includes a costs component, creates legal and equitable entitlement in the provider or practitioner. Breach of a regulatory provision does not negate that entitlement. Different arguments are used here to exclude any claim of entitlement in both the criminal and civil components of the matter. In one it is excluded as a significant mitigating matter, and in the other, permits entry of a civil judgment, without any procedural capacity for the respondent to contest the claim of loss or damage.
The contradiction becomes manifest if the criminal sanction ought reflect the full amount taken, irrespective of partial entitlement and the civil judgment be entered because of the sum averred because of a component of the criminal law and the respondent must find recourse in some other undefined way. On the argument, both the criminal and civil law ought not recognise partial entitlement or provide procedural fairness.
If the Director wished to achieve his desired outcome, he was required to have the matter determined through evidence, not averment. That required the conduct of a disputed facts hearing and/or the provision of additional material to the Court.
I would dismiss the appeal.
File No 825/2009
DIRECTOR OF PUBLIC PROSECUTIONS v
JOHN WILLIAM AVERY
REASONS FOR JUDGMENT COURT OF CRIMINAL APPEAL
BLOW J
1 May 2009
This is an appeal by the Director of Public Prosecutions in respect of orders made upon the sentencing of the respondent, John Avery. Mr Avery used to be a legal practitioner. He misappropriated over $500,000, mainly from the trust account of his practice, over a period of nearly six years, from 26 May 2000 to April 2006. The bulk of that money was stolen from clients of the practice. He pleaded guilty to one count of misappropriation as a company officer and 129 counts of stealing. On 18 September 2008 he was sentenced to 4 years 6 months' imprisonment, with a non-parole period of 2 years 3 months. The learned sentencing judge also made four compensation orders pursuant to the Sentencing Act 1997, s68, requiring the respondent to pay a total of $80,506.59. The Director contends that the head sentence and non-parole period were manifestly inadequate, and that compensation orders should have been made in respect of every charge, each requiring the payment of the full amount misappropriated or stolen.
Mr Avery was not a sole practitioner. At all material times, the relevant practice was operated by a legal practitioner corporation in accordance with the Legal Profession Act 1993, s154. Prior to March 2001, the proprietor of the practice was Taslaw Pty ACN 079 275 120, which traded under the name Avery Keal. In March 2001 that corporation changed its name. Thereafter, the proprietor of the practice was Taslaw Pty ACN 096 116 200, which traded as Avery Partners. I will refer to the two corporations collectively as "Taslaw Pty".
Matters relevant to sentencing
A significant prison sentence was called for in this case because of the following factors:
·The total of the amounts stolen and misappropriated was $512,218.78.
·Very little of that money has been repaid. To be precise, Mr Avery has repaid a total of $36,500.51, which is a little over 7 per cent of the total amount misappropriated and stolen. Two clients received full refunds from him. Three individuals received partial reimbursement. The rest of his victims have received nothing from him.
·Mr Avery's criminal conduct extended over nearly six years.
·His criminal conduct involved a large number of dishonest acts. Although he pleaded guilty to 130 charges, some of those charges related to multiple acts of dishonesty. Count 1 was a rolled up count that related to 46 misappropriations from Taslaw Pty. Count 2 was a rolled up count that related to five thefts of amounts paid by clients to Mr Avery as the agent of Taslaw Pty. Count 62 was a rolled up count relating to 14 thefts from money belonging to a client named Moore. Quite apart from the acts of misappropriation and stealing, there were many dishonest acts whereby Mr Avery falsified accounting records to conceal his dishonest activities.
·Mr Avery's crimes each involved breaches of trust. He breached the fiduciary duties that he owed to his clients as a legal practitioner. He breached the fiduciary duties that he owed to his co-directors as a director of Taslaw Pty.
·Crimes like this reduce the confidence of the public in the legal profession and cause harm to the reputation of the legal profession generally.
·In many cases, Mr Avery stole some of the proceeds of claims for workers compensation, and for damages for personal injuries. The victims included at least 10 recipients of workers compensation and at least 40 recipients of damages for personal injuries. The funds that such clients received must often have included amounts that were intended to compensate them for total or partial incapacity for work, as well as future medical expenses. Some of these victims might have been financially disadvantaged as a result of their injuries.
·Mr Avery's financial position was above average. He had an income of about $150,000 per annum. This was a case of greed, not need. He committed these crimes because he was living far beyond his means.
The following mitigating factors were taken into account by the learned sentencing judge:
·Mr Avery was 60 years old, and married with children.
·He had worked as a legal practitioner for over 30 years. He had successful practices and a very good reputation as a lawyer.
·He had been prepared to do work without payment if the needs of his clients required it.
·He had contributed to the community in relation to football, racing, politics and the arts.
·He had had a good reputation generally.
·As a result of his offending he had been struck off the roll of legal practitioners, lost his livelihood, and lost much of his reputation.
·He was near bankruptcy.
·He had facilitated the administration of justice by making admissions in police interviews, not requiring committal proceedings, and pleading guilty. However he pleaded guilty only after considerable time had been taken to investigate the strength of the Crown case in relation to the charges.
·Had Mr Avery not committed these crimes, some of the money that he stole or misappropriated would have flowed to him as part of his share of the profits of Taslaw Pty. Many of the charges related to matters in which Mr Avery stole from the clients and then ensured that Taslaw Pty did not send bills to the clients for legal costs and disbursements. Had the stealing not occurred, Taslaw Pty would have sent bills to the clients and received payment for services rendered. The clients would have been out of pocket to some extent, not as the result of theft, but as the result of their liability to pay legal costs and disbursements for the work that was done for them. Mr Avery's share of the fees paid for their legal work would have come to him.
·Mr Avery regretted committing these crimes.
This was not a case where the offender had ceased offending before getting caught, nor where substantial restitution had been made.
On the hearing of this appeal, there was a great deal of argument as to the weight, if any, to be given to two factors:
·The fact that Mr Avery was a legal practitioner.
·The proposition that, had these crimes not been committed, their victims would have been liable for costs, and Mr Avery would have received a proportion of those costs.
Stealing by legal practitioners
In R v Cole, unreported, 10 May 1974, the New South Wales Court of Criminal Appeal (McClemens CJ at CL, Begg and Lee JJ) said, at 2:
"Defalcations by persons in a position of trust have to be regarded by the courts as much more serious than other types of defalcations. In this regard the solicitor stands in a particular position. He is an officer of this court, he is held out by it as a fit and proper person to practise his profession, to receive his clients' money and to be the recipient of their justified financial trust and confidence. It is not possible for the courts to regard lightly the defaulting solicitor whose actions tend to undermine the security of ordinary people and the fabric of a profession on which and on whose integrity the public are to such an extent dependent. This is particularly the type of case in which the court is entitled to express on behalf of the community, its disapproval of a particular type of breach of trust involved."
That passage was cited with approval by Flatman J in R v Howse [2002] VSC 197 at par35, by Osborn J in R v Just [2003] VSC 274 at par40, and by Habersberger J in R v Grant [2006] VSC 235 at par26.
Because of the factors referred to in Cole, I think that stealing by a solicitor must ordinarily involve a worse breach of trust than stealing by, say, a clerk, the treasurer of a sporting club, or a financial adviser entrusted with money for investment in shares.
I think it is also relevant to consider the financial resources of a thief's victims. All other things being equal, it must be worse to steal from a working person whose earning capacity has been destroyed or impaired as the result of a physical injury rather than to steal from a person who is not financially disadvantaged, such as an investor client who places surplus funds with a solicitor for investment through a mortgage scheme. It is therefore significant in this case that Mr Avery stole from at least 40 clients with personal injuries claims, at least 10 clients with workers compensation claims, and other clients with claims for criminal injuries compensation, and for damages under the Fatal Accidents Act 1934.
Victims not billed for work done by Mr Avery
Counts 3 to 52 on the indictment related to thefts of money that clients had paid to Taslaw Pty in advance on account of costs. Mr Avery did not plead guilty to counts 4 and 34. The Crown did not proceed in relation to those charges. A nolle prosequi was filed in respect of them. In respect of the other 48 charges in this group, it was common ground that Mr Avery had stolen the moneys in question before any work was done. In respect of count 41, it was common ground that no work was ever done for the client in respect of the matter to which the payment related, but that Mr Avery repaid the stolen money, amounting to $2,125, in full.
In respect of the other 47 charges, counsel for Mr Avery told the learned sentencing judge that, after the clients had paid in advance, the services in question were in fact performed. He did not say anything at that stage as to how the size of any of the advance payments compared with the amounts that Taslaw Pty would have been entitled to charge for the services subsequently performed. However he returned to that topic much later in his plea in mitigation, shortly after a luncheon adjournment, and asserted in respect of these matters that "at the end of the day there is no loss". The Director of Public Prosecutions made submissions in reply, but did not dispute that assertion. He did refer to this group of charges, but his submissions in relation to them concentrated on the question of whether compensation orders should be made. I will deal with the arguments relating to compensation orders later in these reasons.
The assertion that at the end of the day there was no loss amounts to an assertion that, in relation to each of the 47 relevant charges, the amount stolen from the client was no less than the amount that Taslaw Pty would have been entitled to charge for the services subsequently performed.
The learned sentencing judge did not receive any sworn evidence in relation to the charges to which Mr Avery pleaded guilty. He was therefore obliged to act upon the version of the facts in the unsworn material before him which, within the bounds of possibility, was most favourable to Mr Avery: Nash v Haas [1972] Tas SR 1. It was not beyond the bounds of possibility that none of the 47 payments exceeded the amount that Taslaw Pty would have been entitled to charge for the work subsequently done. The learned sentencing judge was therefore obliged to sentence, in relation to these 47 charges, on the basis that the clients each eventually got what they had paid for; that Mr Avery had stolen their money before their work was completed; that the clients did not end up out of pocket; and that the other persons entitled to share in the profits of Taslaw Pty were out of pocket because Mr Avery had seen to it that Taslaw Pty had not charged in the usual way for the services in question.
The position is different in relation to counts 53 to 133. A nolle prosequi was entered in relation to count 54. In relation to the other 80 charges in this group, counsel for Mr Avery did not go so far as to assert that the amount stolen from each client was no less than the amount that Taslaw Pty would have been entitled to charge for services rendered. Some of these charges related to thefts by Mr Avery from the proceeds of settlements that included components in respect of party/party costs. In some such cases, Mr Avery stole amounts greater than or equal to the party/party costs components.
At this point, for the benefit of those unfamiliar with the subject, I think I should explain what party/party costs are and solicitor/client costs are. As a general rule, when a court case results in a victory for one litigant and a loss for another, the court will order the loser to pay the winner's costs. Ordinarily, the loser will be ordered to pay costs on a party/party basis. Party/party costs are intended to indemnify the successful litigant in respect of some, but not all, of his or her legal costs. The full costs that a litigant's solicitor is entitled to charge are referred to as the solicitor/client costs. Sometimes, when a case is settled, the solicitors are content to receive the party/party costs as payment in full for all services they have rendered, but often solicitors will charge something additional by way of solicitor/client costs. When they do, the amount charged may be large or small, depending on the amount of work that has been done that is not covered by the party/party costs, and depending on the attitude or policy of the solicitors. The learned sentencing judge was told nothing as to the policy or usual practice of Taslaw Pty in relation to the charging of solicitor/client costs.
Mr Avery's counsel told the learned sentencing judge that in "all instances" the clients whom Mr Avery stole from were not charged solicitor/client costs. He went on to say that, if the clients had received accounts for solicitor/client costs, they "almost certainly would never have argued and said they hadn't got the right money because, before all settlements were effected, basically Mr Avery told them what they'd be getting, and that's what they got." A little later he said much the same thing, in these words:
"Had strictly speaking solicitor/client costs been charged and put through to the firm as proper costs then there would be no quarrel from the client, but what Mr Avery did was wrong."
In relation to counts 53 to 133, he did not ever assert that Mr Avery stole no more than the amount that Taslaw Pty would have been entitled to charge by way of solicitor/client costs. None of the files had been costed on a solicitor/client basis. The assertion made was that, if no money had been stolen, and if each client had received a bill for solicitor/client costs equal to the amount, or total amount, in fact stolen in respect of his or her matter, it was likely that none of the clients would have complained. Clients can, of course, be substantially overcharged but not complain.
In fact none of the clients to whom these charges relate had formally complained before Mr Avery's offending was detected. Once it was detected, action was quickly taken. Within a few weeks he was prosecuted by the Law Society of Tasmania, suspended from practice as a legal practitioner, and subsequently struck off the roll of legal practitioners. Prior to those events occurring, a number of clients had pressed Mr Avery for information, final accounts, and so forth, but none had apparently made any formal complaint. The submission that none of the relevant clients would have been likely to complain about a bill for solicitor/client costs could probably be regarded as a fair comment in the circumstances, but it by no means follows that none of the clients is worse off than he or she would have been if no money had been stolen, and if Taslaw Pty had followed its normal billing practices.
Generally speaking, the learned sentencing judge was not in a position to make findings in respect of counts 53 to 133 as to how the amounts stolen from the clients compared with the amounts that they could have been charged for costs, or would have been likely to have been charged for costs, if Mr Avery had acted honestly and normal billing practices had been followed. Full restitution was made in relation to count 130. No issue as to costs could arise as to counts 113 and 118 because they involved thefts of trust and estate funds. In relation to the other 77 charges in this group, the situation was as follows:
· The amounts stolen by Mr Avery were known.
· The amounts that the clients could or would have been charged for costs were not known.
· Since counsel did not assert otherwise, it should be accepted that the total amount stolen by Mr Avery exceeded the total amount that Taslaw Pty would ordinarily have received by way of costs for work done for the relevant clients in relation to the relevant matters.
· The difference, if any, between those two figures in any particular case was unable to be ascertained because none of the relevant files had been costed.
· To the extent that the amount stolen exceeded the amounts of costs, the clients were out of pocket.
· To some unknown extent, the other persons entitled to share the profits of Taslaw Pty with Mr Avery were out of pocket.
· An unknown percentage of the money stolen by Mr Avery would ordinarily have flowed to him as part of his share of the profits of Taslaw Pty.
In his sentencing comments, the learned sentencing judge said:
"It is not ascertainable just what the loss suffered by the clients was and what the loss suffered by Taslaw was, in most cases."
Obviously his Honour was using the word "loss" not to refer to the sum misappropriated or stolen, but to refer to the extent to which individuals ended up out of pocket. In my view it was appropriate for him to take into account, as a mitigating factor, the fact that some of the stolen money would have found its way into Mr Avery's pockets if it had not been stolen, and the fact that both clients and Taslaw Pty ended up out of pocket, in circumstances that made it impossible for him to be more specific as to how far out of pocket. The approach that he took was quite correct.
Manifest inadequacy and appellate intervention
It is clear from a long line of reported cases that there is a need for caution in Crown sentencing appeals; that occasions arise for the bringing of such appeals only in limited circumstances, such as where a sentence reveals such manifest inadequacy as to constitute an error in principle, or where a sentence is so disproportionate to the seriousness of the crime as to shock the public conscience; and that a Crown appeal against sentence should be allowed only if there is manifest inadequacy or if it is shown that the sentencing judge fell into material error of law or fact. See R v Clarke [1996] 2 VR 520 at 522.
Counsel provided us with information in relation to sentences imposed on eight Tasmanian legal practitioners over the last 20 years for crimes involving stealing or other dishonesty. Only one case was worse than the present one. I think it is fair to say that those cases do not reveal any tariff for defalcations of the magnitude of Mr Avery's.
After considering all aspects of this case and the authorities concerning Crown appeals, I have come to the conclusion that the sentence of four years six months' imprisonment, with a non-parole period of half that, does not adequately reflect the seriousness of Mr Avery's offending, particularly the scale, duration and frequency of his offending, and the gravity of his breaches of trust as a solicitor.
In the circumstances I am satisfied the sentence was manifestly inadequate and I would allow the appeal. I would substitute a head sentence of six years' imprisonment. I do not see any need to make provision for a long period of parole in this case, but think that Mr Avery's offending was so serious that his non-parole period should be increased to four years. I would order accordingly
Compensation orders
As I have said, the Director of Public Prosecutions submitted that compensation orders should have been made in respect of every charge, and that each such order should have required the payment of the full amount misappropriated or stolen by Mr Avery. He relied on the Sentencing Act, s68, which contains the following provisions:
"(1) If a person is found guilty or convicted of an offence and the court finds that another person has suffered injury, loss, destruction or damage as a result of the offence, the court —
(a)must, if the offence is burglary, stealing or unlawfully injuring property; and
(b)may, in the case of any other offence —
order the offender to pay compensation for that injury, loss, destruction or damage.
…
(6) A court may exercise its powers under this section if the facts sufficiently appear from any evidence or material presented to the court, or from the available documents, together with admissions made by or on behalf of any person in connection with the proposed exercise of the powers.
(7) In subsection (6),
'the available documents' means —
(a)any written statements or admissions that were made for use, and would have been admissible, as evidence on the hearing of the charge; or
(b)the depositions taken at the committal proceeding; or
(c)any written statements or admissions used as evidence in the committal proceeding.
…
(9) In determining, for the purposes of this section, the amount of loss, destruction or damage to property that a person has suffered as a result of an offence, the court is not bound by the rules of evidence and it may inform itself in any matter in any way it considers appropriate."
The factors relevant to the claims for compensation differ from count to count. The following table sets out the situation in relation to each count on the indictment:
Counts
Situation
1, 2
Compensation orders made.
3
Money paid in advance on account of costs. All stolen. No restitution.
4
Nolle prosequi.
5 - 33
Same situation as count 3.
34
Nolle prosequi.
35 - 40
Same situation as count 3.
41
Full restitution.
42 - 52
Same situation as count 3.
53
Money stolen from trust account. No restitution.
54
Nolle prosequi.
55 - 89
Same situation as count 53.
90
$6,594.80 stolen from trust account, but $3,915 repaid.
91 - 112
Same situation as count 53.
113
Compensation order made.
114 - 117
Same situation as count 53.
118
Compensation order made.
119 – 129
Same situation as count 53.
130
Full restitution.
131 – 133
Same situation as count 53.
134
Nolle prosequi.
No question arises on this appeal in relation to count 1 — the single charge of misappropriation as a company officer — because the learned sentencing judge made a compensation order in respect of that count requiring Mr Avery to pay the total of the amounts to which that charge related. All the other charges were stealing charges. The learned sentencing judge was therefore obliged by s68(1)(a) to make a compensation order in respect of every charge provided he made a finding that a person had suffered loss as a result of the crime in question. However his Honour considered that he was unable to make such findings except in relation to counts 2, 113 and 118.
Counts 41 and 130 concern moneys that were stolen by Mr Avery but later repaid by him in full. In my view it would be absurd to give s68(1) an interpretation that would require a compensation order to be made in such situation. The subsection requires such an order if the Court finds that a person has suffered "loss" as a result of the offence. However I think a victim who has been fully reimbursed by the offender should not be regarded as a person who has suffered loss. There is no need for a person in that position to have a compensation order made in his or her favour.
In respect of counts 3 to 52, excluding counts 4, 34 and 41, Mr Avery contends that the stolen money had been paid by clients in advance to cover costs; that the legal services for which they had paid the money had subsequently been provided; and that they therefore suffered no loss within the meaning of s68.
In respect of counts 53 to 133, excluding counts 54, 113, 118 and 130, Mr Avery contends that each client was liable to be billed for legal costs and disbursements in respect of his or her matter; that the client's liability was or might have been equal to the amount stolen; and that therefore no finding could be made that the client had suffered any loss within the meaning of s68.
In each of these two situations, if the client were to sue Mr Avery at common law for the amount stolen, he would not be entitled to set off or counterclaim the costs due to Taslaw Pty for two reasons: (1) he and Taslaw Pty, in law, are different persons; and (2) the client would not be liable to pay any money to Taslaw Pty unless and until the costs had been billed. In my view there is no reason to interpret the word "loss" in s68 in a way that would produce a different result.
The Acts Interpretation Act 1931, s8A(1), requires a provision in an Act to be given an interpretation that promotes the purpose or object of the Act in preference to one that does not. The evident purpose of s68 is to provide a remedy to victims of crimes that will be simple and speedy. If the word "loss" were interpreted so that liabilities, including inchoate or contingent liabilities, to persons or entities other than the offender would have to be brought into account, the statutory remedy would often be neither simple nor speedy. I think it proper to adopt an interpretation whereby no such liabilities should be taken into account. The result in the present case would be that Mr Avery would be ordered to pay each client the amount stolen, less any amounts reimbursed, and Taslaw Pty would retain its rights against the client. If the client recovered the amount lost, Taslaw Pty could charge the client for the services it provided.
In other words, I believe the word "loss" in s68(1) refers to a loss that exists at the time of the making of the order, after taking into account any payments made by the offender by way of restitution, and ignoring any actual, inchoate or contingent liabilities of the victim to a person other than the offender. Questions may arise in other cases as to what the position would be when there is a defalcation by a sole practitioner, but such questions do not need to be answered in the context of this appeal.
It follows from what I have said that the learned sentencing judge should have made compensation orders in respect of every charge to which Mr Avery pleaded guilty except those where full restitution was made, namely counts 41 and 130. Where partial restitution was made, it follows that Mr Avery should be ordered to pay only the outstanding balance.
Accordingly, I would make orders requiring the respondent to pay compensation to the victims named in the following counts, as follows:
(a)as to count 90, in the sum of $2,679.80;
(b)as to counts 3, 5 - 33, 35 - 40, 42 - 53, 55 - 89, 91 - 112, 114 - 117, 119 - 129, and 131 - 133, all inclusive, in the amount specified in each such count.
File No 825/2009
DIRECTOR OF PUBLIC PROSECUTIONS v JOHN WILLIAM AVERY
REASONS FOR JUDGMENT COURT OF CRIMINAL APPEAL
TENNENT J
1 May 2009
I have had the benefit of reading the reasons for judgment of Blow J and with respect I agree with them. I would also allow the appeal and agree with the orders proposed.
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