Director of Public Prosecutions v Carley

[2021] VCC 1897

IN THE COUNTY COURT OF VICTORIA Revised
Not Restricted
Suitable for Publication

AT MELBOURNE
CRIMINAL JURISDICTION

CR-19-02080

DIRECTOR OF PUBLIC PROSECUTIONS

v

MICHAEL CARLEY

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JUDGE:	HIS HONOUR JUDGE MCINERNEY
WHERE HELD:	Melbourne
DATE OF HEARING:	10 September 2021, 5 October 2021, 19 October 2021
DATE OF SENTENCE:	22 November 2021
CASE MAY BE CITED AS:	DPP v Carley
MEDIUM NEUTRAL CITATION:	[2021] VCC 1897

REASONS FOR SENTENCE
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Subject:  CRIMINAL LAW

Catchwords:  Sentence – Plea of guilty – False Accounting – Theft – Power of attorney – Deceased Estate - Breach of fiduciary duty - Executors and trustees – Imprisonment – Non parole period

Legislation Cited: s74(1), s83(1)(a) Crimes Act 1958

Cases Cited:Keane v R [2011] VSCA 156 - DPP v Caulfield [2019] VSCA 131 - Ibbs v The Queen [1987] HCA 46  - CDPP v Curtis [2017] VSC 613 - Worboyes [2021] VSCA 169

Sentence:Total effective sentence of 3 years and 8 months imprisonment with a non-parole period of 2 years and 6 months.

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Ms J. Cavka	Office of Public Prosecutions
For the Accused	Ms H. Fink	Bayside Solicitors

HIS HONOUR:

1Mr Michael Carley comes before the Court aged 68,  he was born on 31 January 1953.  He is an accountant by profession and these crimes were committed when he was aged 57 through to 65.  A plea was conducted in this Court on 19 October of this year.  It was conducted, in part at least, remotely and I thank everyone involved in that.

2On that day, Ms Cavka appeared on behalf of the Director, as she does today.  Ms Fink appeared on behalf of Mr Carley, as she also does today.  The prosecution filed Exhibit A, which was the amended prosecution opening which is dated 26 March 2020, there are three schedules attached thereto, which I will come to later.

3Ms Fink, on behalf of Mr Carley, accepted the facts set out in Exhibit A as the facts upon which I am to sentence her client.  The victims, are the beneficiaries of the Estate of Kenneth John Butler.  Mr Carley, when Mr Butler was alive, was his accountant.  Mr Carley was his accountant at the time of the will, and indeed when Mr Butler became ill, was his power of attorney.

4Mr Butler died in 2003, and upon his death Mr Carley became one of his executors and trustees.  The residuary Estate was left to eight beneficiaries and probate was granted to the executors, on 16 September 2003.  Insofar as Mr Carley’s role, apart from the general role as executor, he kept the accounts and prepared the annual statements for the Estate.

5Mr Carley started his own practice in 2010 and took the Estate account with him,. It was not long thereafter that this offending began. 

6The indictment is K12129053.  There are four charges in the indictment.

7The first charge is an offence against s83(1)(a) of the Crimes Act 1958, a charge of false accounting by way of dishonesty and, with a view to gain.  The period of false accounting was from 1 July 2010 to 30 June 2018, a period of eight years.  Parliament has prescribed a maximum penalty for this crime of 10 years’ imprisonment.

8The crime itself relates to the eight occasions in which the accounts were prepared on behalf of the Estate, and on each of those occasions, there was false accounting insofar as either a term deposit or E-Trade details in regard to the Estate which was utilised by Mr Carley to cover up the thefts which are detailed in Charges 2 to 4; that is, thefts from the Estate.

9The first of those theft charges is Charge 2. Each of the theft charges is an offence against s74(1) of the Crimes Act 1958 for which the maximum penalty imposed by Parliament is 10 years’ imprisonment. The period in Charge 2 is from July 2010 to December 2012. In that period, as detailed in Schedule A to Exhibit A, the amount stolen from the Estate was $204,317 by way of 41 cheques paid to himself, into any of three different accounts that he conducted.

10Charge 3 relates to the period from September 2013 through to August 2015.  This relates to six cheques which diverted the sum of $25,215 from the Estate, and these are set out, in Schedule B to Exhibit A. 

11The fourth charge occurred from October 2015 through to July 2018, and it involved the sum of $174,152.78, set out in Schedule C to Exhibit A which, as I count it, is 47 cheques.

12Mr Carley’s business was called Carley Advisory, located on Nepean Highway, Frankston.  At the time, in regard to the Estate, Mr Carley was both executor and, as I said, trustee.

13The Estate finances were able to be utilised by Mr Carley under his own signature; that is, a single cheque signed by him without being countersigned, and in each instance set out in Schedule A, B, or C, cheques were drawn upon the Estate and paid to one of three different bank accounts that he conducted.

14Over the eight years, the prosecution says 105 cheques.  My maths says 94, but there you are.  I might be counting incorrectly.  But at any rate, between 94 and 105 cheques were written by Mr Carley, and $403,685 was stolen from the Estate.  At the end of each year, false entries were made to protect Mr Carley from detection.  Clearly, this criminality involves a gross breach of fiduciary duty as an executor, accountant and trustee.  It is to be noted that no repayments have been made.

15As I said earlier, detection came about apparently from a disgruntled employee of Mr Carley’s sending an email to the solicitors for the Estate on 18 September 2018.  I understand that employee is an observing witness today.  Subsequently, Mr Carley was interviewed by the Estate solicitors.  Mr Carley admitted that he may have overcharged the Estate, and ultimately that he had diverted funds for his own personal use.

16Mr Carley said, however, that he had repaid some of those funds, which turned out to be false, and that he intended to repay the monies taken from the Estate, which turns out to be an intention that has not been fulfilled.  Mr Carley made a record of interview on 8 May 2019.

17Mr Carley said in that record of interview that he had kept accounts insofar as the money that he had stolen from the Estate.  The false accounting, in the sense of showing the E-Trade account in the Estate accounts, simply did not exist.  That is, the E-Trade account did not exist, and Mr Carley accepted in such record of interview, in the answer to Question 305 that he had breached the fiduciary duty that he owed.

18Mr Carley comes before the Court with no prior offences.  He has served no pre-sentence detention.  Insofar as the sentencing submission tendered by the prosecution, Exhibit B, the prosecution submitted that the appropriate sentence, taking into account all of the matters set out in the plea material by Ms Fink, was one of immediate gaol with a non-parole period.

19I was referred to a number of cases in these proceedings, but in particular by the prosecution Keane v R [2011] VSCA 156 and DPP v Caulfield [2019] VSCA 131.

20As detailed by the High Court in Ibbs v The Queen [1987] HCA 46, the heinousness of crimes can vary, depending on the circumstances, on the spectrum of heinousness.

21Looking at the Caulfield case, for example, it concerns roughly the same sum as stolen here, where similar steps were taken by Ms Caulfield to protect the false accounting.  However, the role that she performed in regard to the victim corporation was that of a bookkeeper, and the methodology she undertook was described in the report as unsophisticated. Mr Carley’s position, by way of comparison obviously evoked a far higher responsibility, as being trustee and/or executor and accountant for the Estate, and, his crimes took place over a much longer period. 

22The case of Keane, again, involved a similar amount in regard to a person who was a golf club manager. The reasons expressed for the criminality were gambling and financial issues. The determination of the sentencing Judge was reduced because of factors determined by the Court of Appeal not taken into account, being mitigation coming about by way of the lengthy delay and a longstanding mental impairment.

23I, take such cases into account as guideposts in the sentencing calculus.  However, ultimately, as again said by the High Court in Dalgliesh (2017) 91 ALJR 1063, 1075, what Mr Carley is entitled to in this sentence is an individualised and just sentence based on the facts of this case, which I hope I have achieved.

Plea of Mr Carley

24Coming then to the plea itself, prior to the current counsel and solicitors taking over Mr Carley’s defence, I  had a statement from him which was undated.  It was not tendered by Ms Fink, but I noticed in the statement that he refers to the fact that his fellow trustee, who was in fact the solicitor, had trusted him completely insofar as his running of the Estate, and the statement of Mr Carley that, “I deceived him”,  that he is truly sorry for doing so and that he had compromised his staff, his co-trustee, and his career.

25Exhibit 1 was a written plea tendered by Ms Fink dated 14 October 2021.  Ms Fink correctly classifies this offending as a serious breach of trust.  While correct in that aspect, I do not accept the analogy she draws to CDPP v Curtis [2017] VSC 613. It is a decision of a single justice in the Supreme Court of Victoria.

26The circumstances were quite different, albeit that Mr Curtis was aged 62 and came before the Court with no priors.  This generally involved what is well known as the Securency fraud.  It involved the corporation for whom Mr Curtis worked in a conspiracy to bribe others.  It was a serious charge. However, the point is made in paragraph 21 of the sentence that there was no financial gain received by Mr Curtis.  This conspiracy to bribe was carried out for and on behalf of his employer.  Equally, the charges of false accounting were done to cover up fraudulent payments made to commission agents overseas, and there was no personal gain. There was, hence, no breach of trust in that regard.  There was also issues as to Verdins 5 and 6, as to mental health in regard to principles 1 and 4, it being noted that he had particular problems having been present in the Mumbai terrorist attack in November 2008. 

27The prosecution did however, concede, despite their own submission as to sentence, that the submission of Ms Fink was within range.  That is, a combined sentence of imprisonment and a Community Correction Order under s44.

28As I said at the plea hearing, given the submission made by Ms Fink, I was prepared to seek a report on the basis that it was clearly understood by Mr Carley that the seeking of the report did not mean that I had decided to so sentence. That positive report was tendered today as Exhibit C. 

29In support of Mr Carley’s plea, Ms Fink put firstly the prior good character of her client. In particular, Ms Fink referred to the documents tendered today which give strong support to that prior good character, and they are the character references of Mr Thomas, Mr McNeil, and Mr Mackenzie.  Ms Fink stressed that Mr Carley has got to the age, of 68 with no priors whatsoever.

30The second matter was really a repeat of the matters set out in his individual letter to the Court, but in particular, at paragraph 16, Ms Fink set out and spoke to it the community contribution made by her client over his period in Frankston, generally in schools and community organisations in that area.

31The third matter put to the Court was the issue of the COVID-19 conditions.  There is no doubt that any period of imprisonment imposed will bring restrictions with it, if only at the moment to ensure there is no further community outbreak.  It is noted that gaol also brings with it reduced ability to have visits, a reduced capacity insofar as being able to undertake programs, and unfortunately, the risk of lockdowns, if not the ongoing risk of contracting the disease in gaol.  However, that risk, fortunately, has been fairly low but for more recent times.

32The fourth factor that Ms Fink put to the Court was Worboyes [2021] VSCA 169, [39], and the plea of guilty. Firstly, on the basis of the usual discount given as a plea made as assistance to the course of justice and being utilitarian, but also based on the principles of Worboyes, her client is entitled to a further palpable amelioration of sentence having pleaded during the current pandemic.

33Ms Fink stressed that, after initial prevarication with the solicitor, Mr Carley was cooperative with the police.  As to the circumstances, it appears that the reason why these crimes took place as set out in Ms Fink’s written submission, Exhibit 1, sub-paragraph 2, (a) to (d), was the financial distress that Mr Carley had got himself into through either the operation of his now personal business and/or the issues that had arose with his ex-wife, issues as to cohabitation and problems insofar as that split up was concerned.

34The seventh factor Ms Fink relied on was the professional history of her client, which she set out in particular at paragraphs 10 to 15, and the cessation of his ability to act in the future as an accountant because of these convictions.

35And the final matter put was the family issues that he currently has to handle.  That is, his elderly parents, and in particular the problems that he has with his daughter.  Essentially, Ms Fink, in putting the submission sought a combined sentence and relied on the principles set out in Boulton v The Queen [2014] VSCA 342.

36Having considered all of the matters put to me, it is a submission that I reject.  I consider, the offending here is objectively very serious, and sustained, with the following features:

(a)   Firstly, a grave breach of trust as

(i)an accountant for the Estate; and

(ii)as trustee/executor of the Estate.

(b)   Secondly, the substantial sum stolen amounting to $403,665; 

(c)   Thirdly, the substantial persistence in this criminality over a period of eight years; 

(d)   Fourthly, the use of fraudulent accounting to cover these thefts on eight separate occasions; 

(e)   And fifthly, the funds being stolen for the purpose, as I have just detailed, of his own financial purposes to either fund his business, his living, or his family.

37The submission put to me by Ms Fink, obviously given the factors she relied on and the positive report, required close consideration.  However, in the end I think the determination that I have made to reject such submission emanates from the facts I have considered. In that regard I quote from Hutchinson v The Queen [2015] VSCA 115, a statement made by Priest JA, at [17], where His Honour said:

‘Acknowledging that a Community Correction Order might be appropriate “even in cases of relatively serious offences which might previously have attracted a medium term of imprisonment”, it should not be thought that Boulton offers a “Get Out of Jail Free” card in situations where a sentence of imprisonment is necessary in a given case to satisfy the various purposes for which a sentence may be imposed.  One of the purposes for which a sentence may be imposed is, of course, “to punish the offender to an extent and in a manner which is just in all of the circumstances”.  There will be cases - indeed, many cases - where, having regard to the seriousness of the offending, a CCO [and I should interpose, imprisonment with a CCO] will be insufficiently punitive to satisfy the need to punish the offender in a manner which, in all of the circumstances, is just.  At the risk of again traversing well-trodden ground, it is axiomatic that in every case the sentence imposed must depend on its own facts, including the circumstances of the offending and the offender, and the circumstances of aggravation and mitigation.’

38Having given much consideration to the submission made on behalf of Mr Carley, the balance here is such that I have no hesitation in rejecting the submission.  I consider the purposes of general deterrence, punishment, denunciation, and specific deterrence are such that a Community Correction Order, even a combined Community Correction Order, would not be sufficiently punitive to mark the offending of Mr Carley, despite the matters put to me, in particular his age and that he has no priors.

39Given that determination, Ms Fink, albeit it that in the plea you acknowledged that the submission of the prosecution was certainly within range; that is, a sentence of gaol with parole, but having had me now pronounce that I reject your submission, is there anything further that you want to say?

40MS FINK:  No, Your Honour.

Sentence

41HIS HONOUR:  Thank you.  Mr Carley, you can stand, please.  You will be convicted on each of these charges.  On the first charge of false accounting, you will be sentenced to imprisonment for two and a half years.

42On the second charge of theft, imprisonment for 18 months.

43On the third charge of theft, imprisonment for six months.

44On the fourth charge of theft, imprisonment for 18 months.

45Making Charge 1 the base sentence, that is a period of two years.  I order that six months of the sentence pronounced in regard to charge 2, two months of the sentence pronounced in regard to charge 3, and six months of the sentence in regard to charge 4 be served cumulatively upon each other and upon the base sentence, making a total effective sentence of three years and eight months.

46I order that the period that must be served by Mr Carley before he is eligible for parole is two years and six months. 

47Mr Carley, having received such a sentence, it is somewhat difficult for me to then tell you what the Parliament prescribes I must tell you, and that is the benefit you get from a plea of guilty. Pursuant to the provisions of s6AAA, I am required, as best I can, to tell you what the sentence would have been had you not pleaded guilty.  Taking only that factor into account, as I say, doing as best I can, had you not pleaded guilty, the sentence you would have got is five years, with a minimum to be served of three and a half years, not the sentence that I have given you of three years and eight months with a minimum to be served of two years and six months.

48Do I need to clarify any matter with either counsel?

49MS FINK:  No, Your Honour.

50MS CAVKA:  No, Your Honour, thank you.

51HIS HONOUR:  Yes, Mr Carley, good luck, and I hope when you come out that you will return to the crime free life that you had before these crimes were committed.  Yes, Mr Carley can be taken away.  I take it he has gone, has he?  Yes.  Yes, we will adjourn the Court.

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