Director of Public Prosecutions v Lowes

[2024] ACTSC 252

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

DPP v Lowes

Citation: 

[2024] ACTSC 252

Hearing Date: 

13 August 2024

Decision Date: 

13 August 2024

Before:

Mossop J

Decision: 

See [38]

Catchwords: 

CRIMINAL LAW – JURISDICTION, PRACTICE AND PROCEDURE – Judgment and punishment – Sentence – where offender misappropriated funds of employer by diverting ticket sales receipts from employer’s account to personal account to fund gambling addiction – simple method of offending - mid-range of objective seriousness – guilty plea, expression of remorse, family caring responsibilities and pro-social behaviour – intensive correction, community service and reparation orders appropriate

Legislation Cited: 

Criminal Code 2002 (ACT), s 332

Crimes (Sentencing) Act 2005 (ACT), ss 11(5)(c), 13(4)(e), 19, 33(1), 35, 36

Cases Cited: 

Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia (1932) 47 CLR 1

DPP v Calhoun(a pseudonym) [2023] ACTSC 189

DPP v Librando [2024] ACTSC 100

Mooney v The Queen [2018] ACTCA 24

R v CA (No 2) [2016] ACTSC 371; 316 FLR 49

R v Mynott [2020] ACTSC 3

R v QU [2019] ACTSC 155

R v Riordan [2015] ACTSC 26

R v Snowden [2022] ACTSC 186

The Queen v Boyle (Unreported, Supreme Court of the Australian Capital Territory, Burns J, 12 April 2012)

Parties: 

Director of Public Prosecutions

Luke Lowes ( Offender)

Representation: 

Counsel

C Daly ( DPP)

K Musgrove ( Offender)

Solicitors

Director of Public Prosecutions

Hugo Law Group ( Offender)

File Number:

SCC 90 of 2024

MOSSOP J:  

Introduction

1․Luke Lowes is to be sentenced in relation to one count of obtaining a financial advantage by deception contrary to s 332 of the Criminal Code 2002 (ACT), charge CAN 9985/2023. The offence was committed between 1 November 2021 and 21 October 2022. The offending involved diverting payments that were due to his employer, Master Builders Australia Ltd (MBA), to his own account. While he made some repayments, the net amount that he received was $61,901.82.

2․The maximum penalty is 10 years’ imprisonment, or 1000 penalty units, or both.

Agreed facts

3․The facts were agreed in a Statement of Facts dated 8 August 2024. In summary, the relevant facts were as follows. Master Builders Australia Ltd (MBA) is a company responsible for industry relations, occupational health and safety, and training and education. It hosts ticketed events for people within the building industry. The offender was an employee from 2019 until October 2022. He was initially employed as an Administration Assistant. He was promoted to the role of Event Co-ordinator. His duties included facilitating payments by attendees of MBA events to MBA.

4․MBA used an event management and ticketing website known as Eventbrite. MBA held a secure online account with Eventbrite. Only two employees of MBA had access to the MBA Eventbrite account, one being the offender, the other being the Finance Manager of MBA.

5․Between February 2022 and April 2022, MBA held seven different events which resulted in ticket sales totalling $62,993.72. Details of the events and the ticket sales are set out in the agreed Statement of Facts.

6․The offender would use the Eventbrite portal so as to change the account to which payments from the Eventbrite software were made so that they went into a bank account that he controlled rather than that of MBA. After the payment was made to his account, he would use the portal again to change the account number back to the MBA account. He would then gamble the money and try to win back what he had lost. He thought he could win back the money he took and pay it back.

7․The total amount that he received was $73,135.97. That was the amount described earlier plus another payment of $10,142.25, which occurred on 26 August 2022. In February and April 2022, he made four repayments totalling $11,234.15. The end result was that he received a net amount of $61,901.82.

8․In May 2022, the Finance Manager of MBA, who was the other person with access to the MBA Eventbrite account, found that there was a discrepancy in the MBA accounts of about $50,000. He communicated with the offender in relation to the missing funds. The offender lied about those missing funds and also gave the Finance Manager a fake email, which purported to be from Eventbrite in relation to those missing funds. After some communications directly with Eventbrite, the Finance Manager found out that the purported email was a fake and discovered the accounts to which the payments had been made. On 7 October 2022, the matter was reported to police. On 21 October 2022, the offender resigned from MBA. On 24 August 2023, the offender attended City Police Station and participated in a recorded interview, in which he made full admissions.

Victim impact

9․A Victim Impact Statement by the Chief Executive Officer of MBA was read to the court. It indicated that, up until his resignation, the offender was a highly respected part of the team. The sense of disappointment at his departure was acute and his departure left a gaping hole in the organisation’s capacity to organise its biggest event of the year. It referred to the offender’s attempts to cover up his wrongdoing. It indicated that the impact on the organisation was not only the money but the betrayal of trust, the ongoing deception and the nightmare that he left for his colleagues.

Objective seriousness

10․Section 332 of the Criminal Code provides that an offence is committed if the person, by deception, dishonestly obtains a financial advantage from someone else. The offending involved substantial amounts individually and in aggregate. It involved a significant breach of the trust placed in the offender as an employee. The amounts were not taken with the intention of permanently depriving the employer of the funds due to the unrealistic expectation that money would be able to be returned as a result of gambling success. Unsurprisingly, the offender lost the money rather than winning it back. The offending involved a moderate degree of sophistication, although the method was relatively simple. The offending is in the mid-range of objective seriousness for this offence.

Subjective circumstances

11․The personal circumstances of the offender are outlined in a pre-sentence report, an intensive correction assessment report, a report by Dr Andrew Carroll (a psychiatrist), a number of reference letters, and a letter from the offender.

12․The offender is aged 41 years. He is married with three children. He had a stable and healthy upbringing in Canberra.

13․He completed Year 12 at school. He worked at Woolworths at the checkout for a couple of years, he did a traineeship with a company doing administrative work. He worked for seven years as a ward clerk at a private hospital. He worked at Bunnings for nine years. After that, he worked for MBA from 2019 until 2022. After that, he returned to  Bunnings for a period until he resigned due to the current charge. He currently works full-time for a waterproofing and tiling company doing inspection work.

14․His wife is also employed. They have a network of pro-social friends. He does not use illicit substances or have a problem with alcohol.

15․He lives in Calwell with his wife and three sons. One of those sons has been diagnosed with a psychiatric condition referred to in the evidence.

16․Both his parents are alive. His mother has recently been diagnosed with cancer and his father recently suffered a heart attack. The offender has caring responsibilities in relation to his mother and will have additional responsibilities in relation to his father.

17․He had a history of gambling on poker machines. His gambling became problematic in 2019. He was spending up to $500 on poker machines  up to twice a week. He thought he would get a “big win”. He was diagnosed by Dr Carroll as suffering from Gambling Disorder (severe) at that time. Since November 2022, he has obtained regular individual therapy with Relationships Australia ACT’s Gambling Support Service’s counselling program.

18․At the point where he resigned from his employment with  MBA, he was unaware that a police investigation was already underway. He started seeing a counsellor as soon as he left the job. He lived separately from his wife for a number of months. He was waiting to be charged.

19․He currently suffers from no mental illness. His Gambling Disorder is in sustained remission.

20․He has done significant volunteer work at the Tuggeranong Valley Australian Football Netball Club over a period of eight years.

21․Dr Carroll assesses him as having very good prospects of rehabilitation as a result of acknowledging his lifelong risk of relapse into pathological gambling, his total abstinence approach, his continuation with appropriate therapy and strong protective factors.

22․The author of the pre-sentence report assesses him as having a low risk of general reoffending with multiple protective factors.

23․He is assessed as being suitable for an intensive correction order and suitable for a community service work condition.

24․The letter from his wife indicates that imprisonment would have a significant effect upon the family, as well as his mother and father, who are ill. He has a positive reference from his current employer, who is aware of his offending. The other references also attest to the fact that he is otherwise of good character and has expressed shame and remorse for what he has done.

Criminal history

25․The offender has no prior criminal history.

Plea of guilty and assistance to authorities

26․The offender entered pleas of guilty on the fourth occasion the matter was listed before the Magistrates Court. At no time did he enter a plea of not guilty. As a result of the admissions made by the offender in his interview with police, the case against him was overwhelmingly strong within the meaning of s 35(4) of the Crimes (Sentencing) Act 2005 (ACT). However, s 36 of that Act empowers the court to reduce the sentence on account of assistance to authorities. Adopting the approach in DPP v Calhoun(a pseudonym) [2023] ACTSC 189 at [64], it is appropriate that he receive a combined reduction under ss 35 and 36 of 25 percent on the sentence that would otherwise have been imposed.

Time in custody

27․The offender has spent no time in custody prior to sentence.

Consideration

28․The offending is distinguished by the gross breach of trust that it involved. Plainly, that kind of breach of trust by an employee is something in relation to which general deterrence is a very significant sentencing consideration. I accept the prosecution submission that deterrence and denunciation, adequate punishment, and recognition of harm done to the victim and to the community are relevant purposes of sentencing in the present case. Because of the personal circumstances of the offender, specific deterrence is a less significant consideration.

29․The offender does not have any criminal history and is otherwise a person of positive good character. The offending was an uncharacteristic aberration. It was contributed to by his gambling addiction for which he must accept responsibility. The human weaknesses that are manifested in a gambling addiction will generally not be a mitigating factor at sentence. Having said that, it would be unrealistic to sentence the offender without recognising that the various commercial interests associated with poker machines deliberately seek to exploit human weakness for their financial benefit and that this exploitation of vulnerability is tolerated by the laws that are presently in place.

30․I accept the submission made by the prosecution that the purposes of sentencing mean, in the circumstances of this case, that no sentence other than a custodial sentence is appropriate. The submissions on behalf of the offender placed emphasis on the manner in which any such sentence was to be served.

31․The parties identified a number of sentences relevant to current sentencing practice within the meaning of s 33(1)(za). They were DPP v Librando [2024] ACTSC 100, Mooney v The Queen [2018] ACTCA 24, R v Riordan [2015] ACTSC 26, The Queen v Boyle (Unreported, Supreme Court of the Australian Capital Territory, Burns J, 12 April 2012), R v Mynott [2020] ACTSC 3, and R v QU [2019] ACTSC 155. They disclosed a range of sentences involving taking money from an employer, which resulted in sentences of imprisonment which were being wholly or partially suspended or served by intensive correction order.

32․A reparation order was sought in the sum of $5414.57. This reflected the net loss to the MBA after the amount repaid by the offender and an insurance payout. It was calculated as follows:

(a)amount misappropriated from MBA: $73,135.97

(b)less insurance payout from Chubb: $56,487.25

(c)less amounts repaid by offender: $11,234.15

(d)amount claimed: $5414.57.

33․The reparation order was sought on this basis because the prosecution accepted as correct and applicable the decision of Murrell CJ in R v CA (No 2) [2016] ACTSC 371; 316 FLR 49, which held that losses of insurers were not within the scope of losses incurred as a direct result of the commission of the offence. I have previously made comments on the operation of this regime in other circumstances: R v Snowden [2022] ACTSC 186 at [52]. It is not necessary for present purposes to decide the scope of the decision in R v CA (No 2) or whether or not it might have been distinguished in circumstances where the victim, rather than the insurer, seeks reparation for the amount that was covered by insurance.

34․Notwithstanding the limited application for a reparation order, whether or not the amount dishonestly obtained by the offender had been repaid was relevant to the consideration in s 33(1)(h) of “any action the offender may have taken to make reparation for any injury, loss or damage resulting from the offence”. Similarly, it would be relevant if the amount could or would be repaid. In the present case, the evidence before the court indicates that it is likely that the offender would have the financial capacity to make reparation. The approach that was taken by the offender was to simply respond positively to the application that was made by the prosecution. Further steps to make reparation to the victim were not taken because the offender was unsure how that should be done. While in many cases offenders will not have the financial capacity to make reparation, if they do, it is clearly a matter of significance. If reparation has been or can be made, that tends to reduce the need for punishment in order to recognise the harm done to the victim and the community and also reflects positively upon the prospects of rehabilitation of the offender.

35․In response to the court having raised the possibility of making it a condition, either of a good behaviour order or an intensive correction order outside the scope of a reparation order, that the whole of the outstanding amount be repaid, counsel for the offender pointed to the provisions in ss 11(5)(c) and 13(4)(e) of the Crimes (Sentencing) Act 2005 (ACT), which specifically refer to reparation orders being made as conditions of either good behaviour orders or intensive correction orders. Those provisions give rise to the argument that the specific reference to making reparation orders a condition of such orders excludes the capacity to use the general power, which is not subject to the conditions that apply to a s 19 order, to make an order which is substantially to the same effect as a reparation order: see Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia (1932) 47 CLR 1 at 7 . In my view, in the present case, it is not necessary to resolve that issue. It is possible to sentence the offender without making a reparation or equivalent order greater than that which was sought by the prosecution. Not making a reparation order for the full amount outstanding leaves the issue to the MBA and its insurer, both of whom I infer are well able to take steps to protect their own financial interests.

36․In my view, the appropriate starting point is a sentence of two years and nine months reduced to two years and one month on account of the plea of guilty and assistance to authorities.

37․In the circumstances of the present case, it is appropriate that the sentence be served without an immediate requirement for full-time detention. In circumstances where the requirement for supervision will be low, there may be little practical difference between an intensive correction order and a wholly suspended sentence subject to a good behaviour order. In my view, it is appropriate to have the sentence served by way of intensive correction, which may involve somewhat more supervision than a wholly suspended sentence. In order to ensure that the overall sentence incorporates a degree of punishment consistent with the purpose of sentencing, I will also impose a requirement to perform a period of community service.

38․The orders of the court are:

1.On the count of dishonestly obtaining a financial advantage by deception (CAN 9985/2023), the offender is convicted and sentenced to imprisonment for two years and one  month, commencing 13 August 2024 and ending on 12 September 2026, which is to be served by intensive correction in the community, with the additional condition that the offender comply with the reparation order made today and the condition that he is to perform 200 hours of community service within 18 months.

2.A reparation order requiring the offender to make reparation in the sum of $5414.57 to Master Builders Australia Ltd  within 12 months.

I certify that the preceding thirty-eight [38] numbered paragraphs are a true copy of the Reasons for Sentence of his Honour Justice Mossop.

Associate:

Date: 20 August 2024