Director of Public Prosecutions v John Buff
[2013] VCC 1424
•2 October 2013, form of order corrected 8 October 2013
| IN THE COUNTY COURT OF VICTORIA | Revised (Not) Restricted Suitable for Publication |
AT MELBOURNE
CRIMINAL DIVISION
Case No. CR-13-00924
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| JOHN BUFF |
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JUDGE: | Her Honour Judge Hampel | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 2 September 2013 and 25 September 2013 | |
DATE OF SENTENCE: | 2 October 2013, form of order corrected 8 October 2013 | |
CASE MAY BE CITED AS: | DPP v. John Buff | |
MEDIUM NEUTRAL CITATION: | [2013] VCC 1424 | |
REASONS FOR SENTENCE
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Catchwords:
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Ms K. Breckweg Ms S. McGirvan (at sentence) | Ms S. McGirvan Mr A. Dhillon (at sentence) |
| For the Accused | Mr T. Burns (at first plea date) Ms C. Gwynn (further plea and sentence) | Mr T. Hargreaves |
HER HONOUR:
1 John Buff you were for many years an accountant and registered tax agent, employed by MBR Group. One of your regular clients whose tax returns you prepared was ACE Tower Hire Pty Ltd.
2 By the end of the 2002 financial year, you had an established relationship with ACE in respect of the preparation of its income tax returns. You prepared their 2002, 2003, 2004 and 2005 income tax returns. ACE accepted the returns prepared by you as correct, signed them, and returned them to you along with cheques made payable to the ATO to meet their tax liability as estimated by you. You were authorised to file the returns electronically and forward the cheques to the tax office.
3 Instead, in each of those 4 income years, you altered the tax return to substantially reduce the estimated tax payable by ACE. You altered the cheques provided by ACE and banked them into accounts controlled by you. You drew cheques for the lesser amounts that the altered tax returns declared was the tax payable and forwarded them to the tax office. You kept for yourself the difference between the amount you told ACE was required for the tax and the amount you actually forwarded to the tax office on ACE’s behalf.
4 This misconduct was eventually exposed. An independent assessment of ACE's actual tax liability was prepared, and amended returns were lodged with the tax office. On each of those 4 years, the tax that ACE was liable to pay, whilst greater than that actually paid on their behalf by you to the tax office, was substantially less than the tax you had originally estimated it was liable to pay.
5 On the figures contained in the original tax returns, you estimated that ACE was liable to pay $139,745.70 for the 2002 financial year, $288,716.30 in respect of the 2003 financial year, $117,013.10 in respect of the 2004 financial year and $196,666.50 in respect of the 2005 financial year. Thus the total amount of tax for the 4 financial years that you estimated ACE was liable to pay was $682,141.60.
6
ACE provided you with cheques to that same total value in respect of those
4 financial years.
7 The tax returns you fraudulently altered and lodged with the tax office estimated the tax payable in those years to be $40,745.70, $7661.6010 and nothing respectively, a total of only $48,407.40, and you paid cheques to the tax office totalling that amount over those 4 years.
8 As a result you stole $633,734.20 from ACE over those 4 years. That was made up of $99,000, $221,054.70, $117,013 and $196,666.50 respectively for the 2002, 2003, 2004 and 2005 years.
9 When your tax returns were redone by the independent assessor the total tax assessed as payable over the 4 years was $417,183, or just over half of your estimate for that period. Once the $48,407.40 you had already paid to the tax office in respect of those 4 income years was deducted, that left a shortfall of tax payments to which the tax office was entitled of $368,775.60.
10 It is those circumstances that give rise to your guilty pleas to one rolled up charge of theft of $633,734.20 from ACE in respect of those 4 income years, and one rolled up charge of defraud the Commonwealth in respect of the $368,775.60 shortfall in ACE’s actual tax liability for those 4 income years.
11 The last of these 4 fraudulent returns, in respect of the 2005 financial year was lodged on 16 May 2006. A little under 2 years later, in February 2008, the tax office raised a query with ACE in respect of its 2006 tax liability. That return had again been prepared by you and ACE had again provided you with the funds to pay the tax office the amount that you had estimated was payable in respect of the 2006 tax liability. You initially told ACE that the monies had been paid, but later said to them that the outstanding amount had inadvertently remained in your trust account.
12 ACE made further inquiries. It was then that it discovered that the amounts of tax paid on its behalf in respect of the 2002 to 2005 income years were substantially less than the amounts they had believed they were liable for, based on the returns prepared by you and signed by them, and based on the cheques that they had written in favour of the tax office and which had been drawn down.
13 In April 2008, 2 months after the ATO asked ACE, and ACE asked you if the 2006 tax liability had in fact been paid to the tax office, you went to a meeting with ACE and admitted that you had altered the payees on the cheques for those tax years. According to the agreed summary, you told ACE that you had used the funds to finance a family member, and a company that you ran called Paramount Steel. You said that you would repay the monies, and it would appear that repayments started within days of that meeting.
14 Although ACE had already made a formal complaint to the ATO in March 2008, a month after the discovery of the anomalies, and a month before this late April meeting with you, it was not until November 2008 that the tax office conducted an interview with you. When interviewed you initially lied, saying you were unable to explain why the estimates that you had given ACE of the amounts of tax payable differed from the estimates contained in the returns lodged by you with the ATO, and asserting that the true amounts of income tax payable were those set out in what we now know to be the fraudulently altered tax returns that you had actually lodged with the ATO.
15 However, in the course of that interview, you resiled from that position. You acknowledged lodging false tax returns, altering the cheques provided to you by ACE, and using the funds for your own purpose. You told the ATO investigators that you had put all the money into Paramount Steel. You said you acted out of desperation. You said that you had discovered in 2001 that an employee of Paramount had embezzled a significant amount of money, which had put the company in enormous financial difficulty, and that you had used the monies from ACE to prop Paramount up so as not to lose your house. You asserted that you had told ACE about it a year earlier and had since repaid all the funds. You estimated you had misappropriated approximately $650,000, and you maintained that the original tax returns that you had prepared had correctly estimated ACE’s tax liability.
16 Your solicitors wrote to the ATO within a fortnight of the interview, advising that they had instructions to accept service of any proceedings against you.
17 Three years went by without any further sign of action. Then in December 2011 you were reinterviewed by the tax office. You again admitted you altered both the cheques provided to you by ACE and the tax returns originally prepared by you. You admitted lodging returns that falsely understated the amount of tax owed by ACE. You said that Paramount had started to experience cash flow problems in 2001 and had a large debt. You said the position grew worse after 2004. You said that you had since discovered that a manager at Paramount had engaged in a considerable theft of company assets, including stock, cash and customer records. You said that instead of closing Paramount, you panicked and decided to access funds from ACE in the manner that you had acknowledged.
18 In that interview, you said again that it was in late 2007 that you had met with an executive at ACE and that you had then agreed to repay all misappropriated moneys in cash, and that you had repaid approximately $600,000. You said repayments had concluded by 2009, and that you had ultimately repaid an amount in excess of the actual funds involved. You said you had been able to make repayments by selling personal assets and obtaining loans from friends.
19 Again your solicitors wrote to the ATO, this time indicating that you would plead guilty to appropriate charges. Despite this, matters continued to move at a glacial pace. It took 3 months for draft charges to be prepared and sent to you, and a full 12 months from the time of the second interview before you were formally charged, in late December 2012. Consistently with your admissions in the second part of the first interview and the second interview, you formally entered pleas of guilty at the first opportunity.
20 And so it is, 10 years after the first act of falsifying the 2002 return and stealing a substantial portion of the funds provided to you to pay that years tax, 7 years after the final theft and falsification of a return, and 5 years after you first confessed your wrongdoing to ACE, and the ATO, you come to be sentenced.
21 This is serious offending. You breached the trust of ACE, your long time client, and the Calvi family, whose business it was. You breached the trust of your accounting firm, MBR, and its principal, Mr Ramage. It takes little imagination to appreciate the personal and business effect on MBR and on Mr Ramage and the other people in his firm, the effect on MBR’s reputation, and its relationship with its other clients. And you breached the trust of the ATO, and the taxpayers generally.
22 Clients of an accounting firm and tax agents are entitled to trust, not only that their accountants will act diligently in advising them about their financial affairs, and preparing tax returns which truthfully and competently assess their liability to pay tax, which neither overstate nor understate their taxable income and tax liability. They are entitled to expect moneys they provide their accountants and tax agents in discharge of their tax liability will be applied for that purpose. They are entitled to trust that their accountants and tax agents will not fraudulently alter their tax returns, that they will lodge them in the form in which they have signed them in good faith, believing them to truthfully record their assessable income and tax liability. The ATO is entitled to trust that a tax return electronically lodged by a tax agent truthfully reflects the signed return provided by the taxpayer and held by the tax agent, and that the tax payment accompanying the return or assessment issued in reliance on it is in full discharge of the taxpayer’s liability for that income year. It is this compact of trust which allows the electronic lodging of returns and accepts as truthful the tax agents holding out of the correctness of the assessment of the tax payable based on the figures provided by the client. Frauds such as this have the potential to impose a more stringent verification regime, on taxpayers and on the ATO, so adding to the time and cost of compliance. And of course, defrauding the Commonwealth by deliberately under representing the tax payable affects all of us, by fraudulently diminishing the pool of taxpayer funds available for services such as hospitals, schools and roads. It places an unfair and disproportionate burden on taxpayers who contribute their fair share, and generates a cynicism about the benefits of doing the right thing.
23 For all these reasons, and subject to the weight to be given to matters personal to you, denunciation, just punishment and deterrence must carry considerable weight.
24 You are now 56, just 2 weeks short of your 57th birthday. You come before the court as a man of previously good character, without any history of mental illness, psychological condition, intellectual or physical impairment, substance abuse or other addictive behaviour which could account for the behaviour which resulted in the laying of these charges.
25 You had a stable, happy childhood, and the benefits of a good education. You have been married for more than 30 years and have 2 adult children. By all accounts family life has been loving, happy and harmonious, and your wife and children too are free of the impairments of the sort that I have already referred to which can so profoundly affect peoples lives.
26 Your wife has operated a successful beauty therapy business from home for most of your marriage. Your daughter now works with her in that. I was told your son has worked with you for the last 7 years in your accountancy practice. As I was also told that you gave up your right to practice as a Certified Practising Accountant, and your registration as a tax agent after your wrongdoing was exposed, I am not sure how that actually works, but however it does, it appears that your son has worked with you both before and after your wrongdoing was exposed, and had continued to do so up until the time of the plea.
27 You went to university after finishing school and chose not to complete the course you embarked on at that stage. You decided instead to devote your time to developing your talents as a professional squash player. You pursued that successfully for some years, and then used that career as a springboard for developing skills and experience in business, mainly in sales and managerial areas associated with squash. That included operating squash centres and selling squash equipment and clothing. You then returned to study. You studied accountancy, qualified as a Certified Practising Accountant and obtained your registration as a tax agent. You pursued for many years a career as a Certified Practising Accountant and tax agent. In addition, you owned and operated other businesses. You have operated a number of motels, initially on your own, and then from 1996, in partnership with a Mr Les Hammond. You also owned, and were the sole director of the company Paramount Steel, whose financial state was said by you to be, at least in part, the reason for this offending.
28 You were living, or gave all the signs of living a prosperous life, as a result of your own endeavours. In addition to your business assets, the motels and Paramount Steel, you and your wife owned your home, you had provided your children with a good education, and then employment with you. That was clearly sufficient to provide you and them with comfortable livings.
29 You have provided a slew of testimonials, from family, friends, neighbours, community contacts and business associates. Many of the referees were at court. It is clear that you are held in high regard, as a person, as a husband, father, brother, friend, neighbour, contributor to the community and businessman, and that this offending has come as a shock to all of your referees.
30 One of the common features of breach of trust offending of this type is, of course – and it is the irony of calling good character in aid – that it is often the very nature of the trust reposed in a person who offends in circumstances you do, a feature of the high regard in which the person is held, that enables such offending to occur, and makes it so difficult to detect.
31 It is for that reason that courts have so often said that past good character carries less weight in cases such as this.
32 In addition, in your case, there is a tension between, on the one hand, the evidence of your good character, of the regard in which you were held by your business friends and colleagues, and the extent to which they, or at least some of them, were prepared to go to assist you in financial need, and the explanation, initially advanced on the plea, that you defrauded ACE and the ATO because you were in desperate financial need, and otherwise risked bankruptcy, and losing the family home.
33 As the evidence presented to me on the plea revealed, if you were in need of money, your standing with your business associates was such that you had immediate, unquestioning and legitimate access to substantial funds, as needed, and repayable only if and when you were able to do so.
34 Your business partner Mr Hammond, with whom you owned the four motels, gave evidence, later supported by the production of records of Fingal Glen, one of the motels, that he advanced you $100,000 in late April or early May 2008. This was just days after your meeting with ACE. He said that you told him that you had admitted to misappropriating moneys from ACE, and needed the money to make part repayment. He gave evidence that he later borrowed a further $200,000 from another motel owning friend, which was processed through the Fingal Glen account in mid December 2008. He said you told him that you needed this money also for ACE. He gave evidence that he withdrew the funds on each of those occasions in cash, and witnessed you handing the cash to Mr Calvi, of ACE. He said he provided you, in addition to the initial $100,000 and that further $200,000, monthly cash amounts of $17,500 between the time the initial $100,000 was paid, and the time the subsequent $200,000 was paid.
35 Mr Hammond had previously sworn a statutory declaration which was tendered on the plea in which he said he had provided you with a total of $433,000 in cash for you to pay to ACE. He deposed that these payments were in addition to an amount of $460,000 which was paid under a deed of settlement that you subsequently entered into with ACE.
36 ACE’s financial officer, Ms Hamilton, has, since the first day of the hearing, provided a statement which I am told details payments by you of $199,000 on 24 Sept, $30,000 on 3 November, and $120,000 on 18 November 2008.
37
In June 2009 you signed a deed of settlement, which was provided to me on the plea. In that, you acknowledged that you had become liable to ACE for damages for conversion and misleading and deceptive conduct. In the deed you acknowledged that the precise amount of damages was not agreed, but exceeded $274,000. The deed committed, not you, but Mr Hammond, and
Mr Ramage, your former principal in the MBR group, to pay ACE $460,000 in full settlement of the claim for damages for your acts of conversion and misleading and deceptive conduct.
38
The settlement amount was to be paid by an initial payment of $250,000 by
10 July 2009, rising by $2,000 if paid late, followed by 11 monthly instalments of $17,500, and a final payment of $17,500 by 10 July 2010. A letter from
Mr Fice, ACE’s solicitor, written earlier this year, confirmed repayment of the full amount of $460,000 pursuant to the deed of settlement. The deed of settlement also provided for the payment to be made by way of cheque or electronic funds transfer.
39 Ms Hamilton’s further statement I was told also acknowledged payments by you or on your behalf, after the deed was entered into, of $252,000, that's the original payment of 250,000 plus the penalty of $2,000 for late payment, followed by 11 monthly payments of $17,500 between August 2009 and September 2010. Those dates slip out by a month or two from the dates set out in the schedule of repayments in the deed, but otherwise the payments accord with it.
40 In total, Ms Hamilton recorded $811,000 in repayments by you or on your behalf. Almost half of that total amount was paid in the period between your admission of the theft to the Calvi's in April 2008, and the execution of the deed of settlement in June 2009.
41 On Mr Hammond’s evidence, he provided you with $433,000 in cash before the deed was signed, although in quantities and at times that did not neatly tally with Ms Hamilton’s records. Although he, and not you, was the party bound by the deed to make the repayments agreed to in the deed, it is not clear how much of the further amounts paid under the deed came from him, and how much of it came from you.
42 Mr Burns, who appeared for you on the first day of the hearing, placed much emphasis on the fact you had repaid more than the amount stolen from ACE. He also submitted that some of the payments were made for purposes other than repayment of the debt. In particular he said that he was instructed that the $200,000, the second amount that went through the Fingal Glen account, was paid to assist Mr Calvi senior to buy one of his sons out of the business and he pointed to the coincidence in timing between that payment and the resignation of the son to support the submission. He submitted, and led evidence from Mr Hammond to like effect, that you had had concerns about making cash payments and that you had continually stressed to Mr Calvi that the moneys you were repaying him should have been paid to the tax office.
43 When the plea hearing resumed, Mr Burns had been replaced by Ms Gwynn. Ms Gwynn expressly disavowed any suggestion that the repayments were for anything other than legitimate reimbursement of moneys misappropriated, and the on-costs associated with that, such as additional accountancy and legal expenses.
44
In referring to the hardship which would be caused by your imprisonment,
Mr Burns submitted that as between you and Mr Hammond, you were the one with the business acumen and Mr Hammond gave evidence to like effect.
45 The explanation initially advanced by you to ACE, that some of the moneys went to a family member, was not put on the plea. I was told that the sole explanation was to make good the shortfall in Paramount’s accounts.
46
The evidence of your qualifications, experience and practice as an accountant, of your business acumen, your ready access to funds from your own share of the motels businesses, and to access to borrowed funds from
Mr Hammond, makes the explanation advanced for the misappropriation from ACE for Paramount curious and hard to understand.
47 I was told by Mr Burns that you had acted out of desperation, because Paramount, which should have been a lucrative business, was suffering financial difficulties in 2001. He initially said that you believed its financial difficulties were caused by an employee who was embezzling its funds, and that you stole the money from ACE to make good the shortfall because otherwise, you feared personal guarantees you had given over the family home would be called on, and you would lose the house, and risk bankruptcy.
48 When asked how Paramount’s 2001 difficulties resulted in thefts from ACE in 2003, and then at yearly intervals until 2006, Mr Burns said that Paramount continued to suffer difficulties after the first injection of stolen funds in 2003. He said an employee was sacked on suspicion of embezzlement, that complaint was made to the police but after investigation, no charges had been laid. Further inquiry revealed that the sacking and the report to the police did not occur until 2006.
49 When I asked whether anything was done to protect against the suspected embezzlement in 2003 before injecting the first amount of funds misappropriated from ACE into Paramount, I was told that no one was sacked at that time because you were not sure if funds were actually being embezzled, and, if they were, which employee was responsible. When pressed, Mr Burns said that no steps were taken to ascertain whether embezzlement was in fact occurring, and if so, who was responsible before the first lot of stolen moneys were injected into Paramount. Nor, I was told, were any steps taken to protect against future embezzlement then, or before any of the further injection of funds into Paramount.
50
When asked, Mr Burns was simply unable to explain why a person with the business acumen that you had displayed over the years would steal money from ACE to plug the hole in Paramount’s finances without taking any steps to prevent its recurrence. There was no answer to the question why you would continue to steal from ACE to replenish moneys you believed had been stolen from Paramount, thereby simply providing more money for the person defrauding Paramount to steal from it. He was unable to explain why the
2001 cash flow problem led to a need to steal moneys in early 2003, when the 2002 tax payment was processed by you, or why the further moneys were needed annually in 2004, 5 and 6.
51 At one stage, he submitted that there may have been other reasons why Paramount was in difficulties, and that it may not have been a viable business after all, but again was unable to explain why you had taken no steps to ascertain the reason for Paramount's cash flow problems, or to remedy them, or to see if they were remediable before stealing money to make good the shortfall.
52 The evidence placed before me demonstrated that you had substantial assets, and could call on friends for financial help if need be. No accounts, financial statements or loan documents were put before me to support the assertion that you risked losing the family home or being made bankrupt if Paramount could not trade out of its difficulties. I am not satisfied on the evidence that this 4 year course of conduct was due to desperation brought about by Paramount’s woes and the risk of losing your home and being declared bankrupt.
53 As Ms Gwynn acknowledged when she replaced Mr Burns on the resumed hearing of the plea, you had choices, and it was your choice to systematically defraud ACE and the ATO and it is that that leads you to where you are now.
54 This was no case of need. You made conscious choices to act as you did to avoid the risk of a depletion of your assets. It was a case of greed, not need.
55 You made an early disclosure to ACE once it became clear that they were investigating anomalies with their tax payments. As I said in the course of the plea, that takes courage, to face a valued client and to admit that you have deceived and defrauded them.
56 Apart from the initial lies you told when first questioned by the ATO in the first part of your interview of late 2008, you have consistently acknowledged your wrongdoing, and indicated your preparedness to take responsibility and to plead guilty to appropriate charges.
57 The fraud may well have been detected once ACE or the ATO decided to review your conduct, but your admissions clearly made it a much easier task. You did not do what many fraudsters do: lie, obfuscate, and eventually admit only to what incontrovertible evidence obtained by others can prove against you.
58 Whether from your own resources, or those of your friends, ACE has been reimbursed its loss. Reimbursement began as soon as the fraud was detected, and was concluded well before you were charged. Again, this counts in your favour and stands in contrast to the conduct of many fraudsters who make no effort to repay, or who come before a Sentencing Court and only then, for the first time, make, what can at its kindest be described as well intentioned but unsupported offers to repay, at some unspecified future time.
59 These matters therefore all count in your favour. You have done all that could be asked to reinstate ACE to the position that it was in before the thefts occurred, but I do not accept, as Mr Burns asserted, that you made the first move to disclose your wrongdoing to ACE.
60 Apart from your assertion in your first interview that that was the case, there is no evidence to support that. I accept that you told representatives of ACE at the meeting of 28 April 2008 of your wrongdoing. But, on the evidence before me, you had already been alerted by ACE to the fact that the ATO had told ACE it had not received its 2006 tax payment, that ACE was making inquiries about its tax payments, and that it had asked you to account for the moneys it had provided to you to make the 2006 payment. You waited 2 months, until a meeting was called by ACE, who by then had discovered the other shortfalls, to reveal what you had done. It is of little importance in the scale of things, but it was one of the matters that was relied on as counting in your favour in mitigation, which on analysis, was simply not supported by the evidence, and unnecessarily diverted attention from the real issues in the plea and the real matters counting in your favour.
61 One of the unusual and complicating features of this offending was the disparity in the tax which you calculated was payable by ACE, and the significantly lesser amount that the independent assessor calculated after the matters came to light. On the first day of the plea hearing when I was asked whether it was part of the case against you that the tax calculated by you in respect of those 4 income years was deliberately overstated, the prosecutor Ms Breckweg said that it was, that is, that the inference was open. Mr Burns said that it was not conceded that you deliberately overstated the tax payable in each of those years, and that it was simply a coincidence, or a product of different approaches by different tax agents that had led to such vastly different calculations of tax payable for each of those years. When the matter returned, following discussions between Ms Breckweg and Ms Gwynn, I was told that the prosecution’s position was that it could not prove beyond reasonable doubt that the returns prepared by you deliberately overstated the tax payable. Whilst I consider it a remarkable coincidence that a tax agent, with the business experience that you have, would have calculated a valued client’s tax in an amount well in excess of that calculated by an independent assessor, in the 4 consecutive years in which you defrauded that client, I am left in a position where I can neither be affirmatively satisfied beyond reasonable doubt that you deliberately overstated the taxable income so as to maximise your take, but nor am I affirmatively satisfied on the balance of probabilities that your calculations were grossly overstated because you took an approach, legitimately open to you, but adverse to your client's interests. I treat the fact that the returns significantly overstated the taxable income as a neutral fact, one which is neither an aggravating feature, nor a mitigating one.
62
Having regard to the fact that Mr Burns’ services were terminated after the first day of the plea hearing, and having been told by Ms Gwynn when the matter returned that you did not consider that he had properly understood or conveyed your instructions, I make no findings adverse to you from
Ms Gwynn’s pulling back from those positions put by Mr Burns that I have detailed. I do not know whether Mr Burns was putting his instructions in respect of those matters, and you became concerned when the flaws in them were exposed, and then sought to finesse the position with new counsel and solicitors, or whether he did misunderstand and misstate the position, and
Ms Gwynn’s instructions are on all fours with those initially given to Mr Burns. I have a sense of disquiet that there is more to this than I have been told, but I must, and do sentence you on the basis of the matters put to me by
Ms Gwynn, and those matters that she expressly adopted from what was put by Mr Burns on the first occasion.
63 This then brings me to the matters properly relied on on your behalf. I have already referred to the significance of your early acknowledgement of wrongdoing, the making of restitution, and your admissions and the early plea of guilty.
64 Also counting in your favour are the absence of previous convictions and the evidence of positive good character up to the time of offending. As Ms Gwynn acknowledged, good character does not carry as much weight in cases of fraud by a professional adviser, using his reputation and professional accreditation to facilitate the fraud, as it may in other cases, for example in cases of single instance, negligent or impulsive behaviour by an otherwise good person. However, as she correctly submitted, evidence of the high regard in which a person is held, of the expectation of support whilst in custody, and upon release, all count very much in your favour in assessing your prospects for rehabilitation, and when considering the weight to be given to specific deterrence.
65 I accept that the effect of conviction will reduce the means for committing like offences again. You have not renewed your registration as a Certified Practising Accountant or as a tax agent since 2008, and you would be unlikely to be able to renew them now. You will face at least a 5 year period of disqualification from acting as a director. More significantly, although you may well continue to engage in business pursuits and investment opportunities, I consider the effect of exposure, charge, conviction and sentence have had a salutary effect on you, and will act as a significant deterrent if you were ever tempted to steal again.
66 Perhaps, and even more significantly, as the testimonials from your wife and children make clear, you are loved by them for the husband and father that you have been. If, indeed, you were motivated by a desire not to lose the family home, they have demonstrated the irrelevance of the bricks and mortar to their regard for you. Their loyalty is unswerving and the burden of their trust in you I hope, will also serve as a deterrent from future offending.
67 You have been remanded now for a month. I accept the reality of imprisonment has been a shock to you. It should bring home to you how much more privileged and advantaged you are than most of those who come before these courts and end up in prison. I accept that too will have a significant deterrent effect. From what I have been told by Ms Gwynn, you have accepted the inevitability of a sentence and you have done your best to make the best of it. You have already been appointed to a position of responsibility as a billet on remand, and you have made inquiries about where you are likely to be sent, once sentenced and classified.
68 I have already, in a different context, referred to the absence of any physical psychiatric, psychological or intellectual impairment, and the absence of any problems with substance abuse or other problem or addictive behaviours such as gambling.
69 All these matters too point to a low risk of reoffending, to not needing any further weight to be given to general deterrence than those factors themselves provide, and to assessing your prospects for rehabilitation as being at the high end of the scale.
70 In outlining the circumstances of the offending and its aftermath, I referred to the delay in investigation and charge, once matters came to light. The delay in that period was not attributable to you, and Ms Breckweg did not seek to justify it. This is yet another case where the sentence to be imposed is reduced by reason of that unexplained and unjustifiable delay. The deterrent effect of sentencing is significantly diminished when a sentence which otherwise might be thought to be appropriate must be reduced by reason of the unexplained and unjustifiable delay in investigation and charge by the responsible authority. Agencies and prosecuting authorities must understand that it is their conduct, in failing to investigate and charge in a timely fashion, which leads to that reduced deterrent effect, and to a potential diminution in public confidence that sentences appropriately reflect the seriousness of the offending.
71
It was acknowledged that no sentence other than one of imprisonment immediately served was appropriate. Mr Burns' written submissions called for a sentence of less than 3 months followed by a lengthy community corrections order on the state charge, and a concurrent sentence of less than 3 months with a lengthy period of release on a recognisance release order on the Commonwealth charge. He acknowledged in oral submissions that the Sentencing Act specifically prohibited the imposition of a suspended sentence, which includes release on a recognisance release order running concurrently with a community corrections order. In any event, in the circumstances I have detailed, even taking into account the considerable factors counting in your favour, and the effect of delay, the circumstances make a sentence involving a term of imprisonment immediately served of
3 months or less in my view, entirely inadequate.
72 The matters that I have detailed that count in your favour go both to reducing the head sentence that would otherwise have been appropriate and to fixing the non parole period and I agree with Ms Gwynn's submission that there should be a considerable gap between the head sentence and the non parole period.
73 Could you now please stand.
74 John Buff, on the two charges to which you have pleaded guilty, you are convicted. On Charge 1 of theft, you are sentenced to be imprisoned for a period of three years. On Charge 2 of defraud the Commonwealth, you are sentenced to be imprisoned for a period of 18 months. It is my intention to impose a total effective sentence of four years with a non parole period of 18 months. I declare that you have served 29 days in pre-sentence detention and direct that that be counted and reckoned as part of the sentence already served.
75 I declare pursuant to s.6AAA of the Sentencing Act that but for your pleas of guilty, I would have fixed a total effective sentence of six years and a non parole period of three years. I just need to make some other orders and I will ask you to take a seat Mr Buff whilst I do that.
76 HER HONOUR: Ms McGirvan my understanding of what I must do in terms of declaring the commencement date of a Commonwealth sentence where I am making it part cumulative upon a state sentence is directing the state sentence start today and to then make a direction for the commencement date of the Commonwealth sentence so as to allow for that period of 12 months cumulation in effect on the state sentence.
77 MS McGIRVAN: Yes Your Honour.
78 HER HONOUR: If I'm right on that then I should direct that the sentence on Charge 2 commences two years and six months after the commencement on Charge 1. Is that correct?
79 MS McGIRVAN: I'm sorry Your Honour?
80 HER HONOUR: It's a sentence of 18 months on Charge 2.
81 MS McGIRVAN: Yes.
82 HER HONOUR: And I want 12 months of that to be served cumulatively upon the sentence on Charge 1.
83 MS McGIRVAN: Yes Your Honour.
84 HER HONOUR: So that means six months of it is to be served concurrently, so that means it must start six months before the expiration of the State sentence.
85 MS McGIRVAN: That's correct Your Honour.
86 HER HONOUR: Is that right? Ms Gwynn do you agree with that?
87 MS GWYNN: I'm not sure. I'm just working through the maths in my own head, sorry Your Honour.
88 HER HONOUR: Yes. So I find the easiest way is to draw a line with the three years because that's the first sentence.
89 MS GWYNN: Yes.
90 HER HONOUR: Then draw a line with the 12 months extra that goes on top of that for the cumulation of the Commonwealth sentence and then draw a line back for the period that is in effect the concurrent part. Now on the math it's six months concurrent, 12 months cumulative, so that means on my math the Commonwealth sentence must start six months before the expiration of the State sentence.
91 MS GWYNN: Yes I agree with that. If there turns out to be any difficulties - sometimes there is difficulties once the records go back through the prison system - - -
92 HER HONOUR: It can be fixed administratively, but I - - -
93 MS GWYNN: Yes.
94 HER HONOUR: I'd like to try and get it right straight away.
95 MS GWYNN: And we understand Your Honour's intention.
96 HER HONOUR: I think that's the right way to do it isn't it Ms McGirvan?
97 MS McGIRVAN: Yes Your Honour.
98 HER HONOUR: All right, in that case I direct that sentence on Charge 1 commences today. The sentence on Charge 2 commences two years and six months after the commencement of the sentence on Charge 1 and I've made the declaration in respect of pre-sentence detention of the 29 days which is counted and reckoned as part of the sentence already served. That applies to both sentences as I understand it and I - my understanding is also that the form of declaration I've made means that if there is any administrative reduction in the sentence on Charge 1 because of things like prison lock-down that that comes off both sentences, so it's still a total effective sentence of four years. So that's my very clear understanding. If you go back and check and I'm wrong on that and it should be declared in some other way, to give effect to my attention, let me know and I can make that order administratively in chambers with your consent without having to bring everybody back.
99 MS McGIRVAN: As Your Honour pleases.
100 HER HONOUR: There were no further orders Ms McGirvan that were required to be made?
101 MS McGIRVAN: No Your Honour.
102
HER HONOUR: Is it accepted that my reasons for sentence have sufficiently clearly discharged my responsibilities under the Commonwealth Sentencing regime of explaining the sentence, the effect of it and the reasons for it to
Mr Buff?
103 MS GWYNN: Yes, the only point of perhaps clarification because we understand things differently at the Bar table that might otherwise be understood is that it's Your Honour's intention for 12 months of Charge 2 to be cumulative on Charge 1.
104 HER HONOUR: Charge 1, that's right.
105 MS GWYNN: Thank you Your Honour.
106 HER HONOUR: Yes. All right thank you. It's a security requirement that I must remain on the Bench whilst Mr Buff is removed so I'll ask for him now to be removed.
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Addendum to Reasons for Sentence
- Before I made the formal orders, I indicated the individual sentences I intended to impose for each charge, the total effective sentence I intended to impose, and the total time I intended to direct Mr Buff to serve before being eligible for parole. I said it was my intention to impose a total effective sentence of 4 years on both charges (that is, to make 1 year of the sentence on the Commonwealth charge cumulative upon the sentence on the state charge), to fix a non parole period, and to require Mr Buff to serve a period of 18 months before being eligible for parole.
- I sought the assistance of the legal representatives of the parties, Ms McGirvan, for the Commonwealth DPP and Ms Gwynn, on the appropriate formal orders which should be made to structure the sentence to conform with State and Commonwealth sentencing provisions in order to achieve my stated intention.
- They each submitted the orders I proposed conformed with the relevant provisions of State and Commonwealth sentencing legislation, and were appropriate to reflect my stated intention. They have since contacted my associate and advised they have come to the view there is an error in the orders pronounced to give effect to my intention.
- The orders I originally made impermissibly declared a total effective sentence combining the State and Commonwealth sentences and fixing a single non parole period. It is not possible to make partial cumulation orders between State and Commonwealth sentences, and fix a single non parole period. Commonwealth sentencing requires a separate non parole period or recognisance release period to be set for a commonwealth sentence. That is, if it is considered appropriate to fix a recognisance release period or non parole period.
- Where, as here, I consider Mr Buff’s release on the state sentence after service of a minimum term should be decided by the parole board, and not the subject of an automatic release after service of a specified period (a partially suspended sentence), I must set a non parole period for the State sentence. As the period of time, in total, on both charges, I consider Mr Buff should serve before being eligible for parole is 18 months, the same period as the Commonwealth sentence, the only way to achieve this aim is to direct the Commonwealth sentence to commence first, on the day sentence was passed, and to direct the State sentence commence 12 months after the commencement of the Commonwealth sentence. As the effect of the partial cumulation order is to have the Commonwealth sentence expire at the same time eligibility for parole on the State sentence can first be considered, this is a case where it is inappropriate to fix a recognisance release period for the Commonwealth sentence. The complicated interplay between State and Commonwealth sentences means that I must fix a non parole period of 6 months on the State sentence, if I am to give effect to my intention Mr Buff serve a minimum of 18 months overall before eligibility for release. Considered alone, a 6 month minimum term is disproportionate to the length of the State sentence. It can only make sense if considered in combination with the Commonwealth sentence.
- The individual sentences imposed are unchanged. However, in place of the declarations made on 2 October, I make the following declarations in respect of the commencement dates of the sentences, and in respect of the state non parole period.
- Declare the sentence on charge 2 commences on the date of passing sentence, namely 2 October 2013.
- Declare the sentence on charge 1 commences 12 months after the sentence on charge 2.
- Direct the minimum term to be served before being eligible for parole on charge 1 is 6 months.
- Declare the period of pre sentence detention on these charges, namely 29 days, be reckoned as a period of imprisonment already served under this sentence.
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