Director of Public Prosecutions v Luong

[2021] VCC 1482

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

AT MELBOURNE

CRIMINAL DIVISION

Case No. CR-21-00641

THE QUEEN

v

THAO THI LUONG

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JUDGE:	HER HONOUR JUDGE CHAMBERS
WHERE HELD:	Melbourne
DATE OF HEARING:	2 August 2021 and 1 October 2021
DATE OF SENTENCE:	1 October 2021
CASE MAY BE CITED AS:	DPP v Luong
MEDIUM NEUTRAL CITATION:	[2021] VCC 1482

REASONS FOR SENTENCE

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Subject:Criminal law – sentence

Catchwords:              Plea of guilty – disposing of property with intent to defraud creditors – disposing of property with intent to defraud creditors after the presentation of a petition – no prior criminal history – lengthy employment history in positions of trust - diagnosed gambling disorder and major depressive disorder existing at the time of offending – however, no causal link found between these disorders and offending against the Bankruptcy Act

Legislation Cited:      Bankruptcy Act 1966 (Cth); Crimes Act 1914 (Cth)

Sentence:Total effective sentence of 24 months’ imprisonment, released after serving five months’ imprisonment upon giving security in the sum of $4,000

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APPEARANCES:	Counsel	Solicitors
For the CDPP	Mr L. Ringwaldt (plea and sentence)	Commonwealth Director of Public Prosecutions
For the Accused	Mr R. Gipp (plea and sentence)	Melbourne Legal

HER HONOUR:

1Thao Thi Luong, you have pleaded guilty to five charges of disposing of property with intent to defraud creditors, contrary s266(3) of the Bankruptcy Act 1966 (Cth) (“the Act”) (Charges 1, 2, 3, 4, and 5) and five charges of disposing of property with intent to defraud creditors after the presentation of a petition contrary to s266(1) of the Act (Charges 6, 7, 8, 9, and 10). The maximum penalty for each offence is five years’ imprisonment. The total value of the property you disposed of with an intention to defraud creditors was $149,775. The offending occurred on various dates between 8 August 2018 and 8 April 2019.

2You have also pleaded guilty to three related summary offences, being one charge of knowingly making a false declaration in a statement of affairs in bankruptcy on 8 February 2019 contrary to s267(2) of the Act (Summary Charge 10); a charge of failing to fully and truly disclose receipt of property valued at $61,500 to the trustee on 8 February 2019 contrary to s265(1)(a) of the Act (Summary Charge 11); and a charge of failing to fully and truly disclose the particulars of disposition of property to the trustee on 10 May 2019 contrary to s265(1)(b) of the Act (Summary Charge 13). Each of the summary offences carries a maximum penalty of one year’s imprisonment.

3You were born in May 1973.  At the time of the offending, you were between 45 and 46 years of age.  You have no prior criminal history. 

Background

4In order to put your offending in context, it is necessary to first set out the circumstances which led to this appointment of the trustee in bankruptcy in January 2019.  This background in the circumstances of your offending are set out in the prosecution statement of facts dated 30 July 2021, which forms the agreed basis upon which you are to be sentenced. 

5Between 13 January 2009 and 31 July 2015, you were employed by a drainage solutions company Cubic Solutions Pty Ltd in the role of finance manager.  Over the course of your employment with Cubic Solutions, you misappropriated funds of approximately $1.65m.  On 27 June 2017, you entered into terms of settlement with your former employer, agreeing to repay this sum in full.  You have never been charged with any offence arising from these circumstances and are not being sentenced for that conduct today.  I only refer to these matters by way of background, as they are relevant to the context in which your offending occurred. 

6Between 30 July 2015 and 18 June 2017, you repaid Cubic Solutions the sum of $390,000, including by way of $5000 monthly instalments made from July 2015 but ceasing in September 2016.  On 18 July 2017, you reached an agreement with the company that you would make further monthly instalments of $5000 but you made no further payments.  On 14 May 2018, a default judgment was entered in the County Court in favour of Cubic Solutions in a sum of approximately $1.4m.  On 6 August 2018, a bankruptcy notice was served on you in respect of this outstanding debt.  The notice warned that failure to pay would initiate bankruptcy proceedings.

7On 31 January 2019, following a creditor's petition by Cubic Solutions, you were declared bankrupt and Mr David Quinn of PCI Partners was appointed trustee in bankruptcy.  In your statement of affairs dated 11 February 2019, you declared you had unsecured creditors owed approximately $1.578m.  You declared that you first had difficulty repaying your debts two to three years earlier.  You told the trustee that your past gambling issues had led to you borrowing money from friends to pay back others, although, none of these people were listed on your statement of affairs. 

Circumstances of offending

8

Turning now to the circumstances of your offending.  Charges 1-5 relate to five separate instances where, following service of the bankruptcy notice on 6 August 2018, you disposed of property totalling $54,285 with the intention of defrauding your creditors.  Between 8 August 2018 and 23 November 2018, you withdrew and disposed of cash totalling $11,830 from your ANZ Access Advantage account, an account that was not declared in your subsequent statement of affairs (Charge 1).  Between 21 August 2018 and 30 October 2018, you withdrew and disposed of cash totalling $2830 from your Bank of Melbourne account, an account that was not declared in your subsequent statement of affairs (Charge 2).  Between

14 August 2018 and 10 October 2018, you withdrew and disposed of cash totalling $4555 from your Westpac Choice account (Charge 3).  Between 2 October 2018 and 11 October 2018, you withdrew and disposed of cash totalling $17,680 from an NAB account held in the name of your daughter and to which you were a signatory (Charge 4). 

9

Between 1 October 2018 and 9 October 2018, you withdrew and disposed of $17,300 from an NAB account in the name of your son and to which you were a signatory (Charge 5).  Charges 6-9 relate to four separate instances where, following the filing of the creditor's petition on 23 November 2018 leading to your bankruptcy, you disposed of property totalling $52,740 with the intention of defrauding your creditors.  On 27 December 2018, you received $31,500 into your CBA Complete Access account and then disposed of the property by making seven separate cash withdrawals on 27, 28 and 31 December 2018 totalling $28,000 (Charge 6).  On 9 January 2019, you received $7000 into your CBA Complete Access account and then disposed of the property by making five separate cash withdrawals on 11, 12 and 13 January 2019 totalling $6800

(Charge 7). 

10Between 7 December 2018 and 8 April 2019, you withdrew and disposed of $13,800 in cash from your ANZ Access Advantage account, an account that was not declared in your statement of affairs (Charge 8) and between 28 November 2018 and 26 January 2019, you withdrew and deposited $4140 in cash from your Bank of Melbourne account, an account that was not declared in your statement of affairs (Charge 9).  Further, between 7 and 8 February 2009, you withdrew and disposed of $45,000 received from Crown Casino, intending to defraud your creditors.  Your receipt of this sum in cash was confirmed through AUSTRAC records and is Charge 10. 

11

Summary Charge 10 relates to making a false declaration in your statement of affairs.  When you signed the declaration on 8 February 2019 you failed to disclose the existence of two ANZ bank accounts and two Bank of Melbourne accounts operated by you, a previous address in Niewand Avenue, Burnside where you had resided between 18 December 2015 until the property was sold in

March/April 2018.  The payment into an undeclared joint ANZ Access Advantage account in the sum of $124,391 being proceeds from the sale of Niewand Avenue, Burnside, of which your share was $62,195.65 and the subsequent transfer of $60,000 into your undeclared ANZ Access Advantage account on 30 April 2018. 

12

Summary Charge 11 relates to your failure to disclose property to the trustee.  On 1 February 2019, the trustee sent you a letter setting out your obligations as a bankrupt, including that all property vested in the trustee upon your bankruptcy and that any property you acquired after that date also vested in the trustee.  You were advised of your obligations to fully and truly disclose all property held by you and its value.  In breach of this obligation, you failed to disclose that between

7-8 February 2019 you won $61,300 at Crown Casino.  On 8 March 2019, your trustee specifically asked about your gambling habits.  You advised that you rarely gambled at Crown Casino and denied holding any substantial amount in cash or gambling credits. 

13Summary Charge 13 relates to your failure to fully and truly disclose the disposition of any property in the two years prior to becoming bankrupt.  On 24 April 2019,  the trustee wrote to you, requesting that you complete a comprehensive document detailing the disposition of property by you, including the nature and purpose of bank withdrawals, superannuation funds and property sales.  A table was provided for this purpose.  You did not complete any of the details requested in the table and on 10 May 2019 provided brief details to the trustee of only the following payments:

·     payments towards your children's vehicles without any details;

·     payments of loan moneys to unspecified friends; and

·     payments towards your self-managed superannuation fund.

14You failed to fully disclose particulars of the disposition of any property in your response to the trustee.  In your e-mail to the trustee, you requested that he not push you over the edge.  You did not participate in a voluntary record of interview, as is your right. 

Personal circumstances

15I now turn to your personal circumstances.  You were born in Vietnam in May 1973 and are now 48 years old.  You came to Australia as a refugee in 1982 when you were aged eight, together with your mother and brother.  The family reunified with your father who was already resident in Australia.  You became an Australian citizen three years later.  You were raised in a loving and caring family and remain close to your elderly parents and to your brother.  Since being bailed, you have lived with your parents and brother in Sunshine North. 

16You attended St Augustine's Primary School and various secondary schools due to your family relocating.  You completed year 12 at Braybrook Secondary College.  You graduated from Victoria University with a Bachelor of Business majoring in accounting in 1994.  For the next three years you undertook employment in accounting and bookkeeping. 

17You met your husband when you were 16 years old and married in December 1996.  After the birth of your daughter in 1998, you returned to part-time bookkeeping until your son was born in 2000.  Until your employment with Cubic Solutions ended in July 2015, you had a steady employment history.  Shortly following the birth of your son, you worked as a financial accountant with a manufacturing company Griffiths & Beerens for five years and then with an engineering firm, Andrew's Engineering for a further three years.  After working for a marketing company for one year, you commenced employment with Cubic Solutions as its finance manager in January 2009.  Your introduction to gambling began in your early 20s when your husband took you to local poker machines venues and then Crown Casino.  However, your gambling became problematic during the period you were employed with Cubic Solutions. 

18For the purposes of these proceedings, you were assessed by Jeffrey Cummins, clinical and forensic psychologist, on 21 May and 3 June 2021.  When asked about your gambling problem, you told Mr Cummins the following:

'Well, gambling took over.  In my role as finance manager with Cubic Solutions, I was managing a lot of money and then I became addicted to gambling.  I'd go to Crown Casino either at the start of the day or at the end of the day.  I was living a double life.  My real friends knew nothing about my gambling but some of them probably now know about my gambling and that's why I've lost most of my real friends and friends because I borrowed money from them in an attempt to gamble and earn more money so that I could pay back more money to Cubic Solutions.' 

19On 30 July 2015, you were dismissed by Cubic Solutions due to the misappropriation of the funds.  You remained unemployed until the beginning of 2017.  Your financial difficulties led to you and your husband deciding to sell your jointly owned property in Newhaven Way, Cairnlea to repay your debts.  The stress of your financial situation ultimately led to the disintegration of your marriage and you separated from your husband in 2016/17.  Despite this, you continue to have a good relationship with your former husband and adult children with whom you remain in regular contact. 

20Your physical health is compromised.  You suffer from joint problems for which you have had three bouts of surgery.  At the age of 35 you were diagnosed with arthritis for which you are prescribed analgesics and glucosamine.  Since 1998 you have been medicated for migraines and an irregular heartbeat. 

21A character reference was provided by your brother Mr Doi Pham dated 22 July 2021 for the purposes of the plea.  You remain close to your brother, even though he was employed by Cubic Solutions as its operations manager.  He now works elsewhere.  He describes you as kind, generous, caring and thoughtful.  He says your life fell apart as your gambling addiction worsened.  He says you have lost almost everything from this addiction, 'Her marriage, her home, herself and worst of all, she's lost the ability to provide the essential things to her two children.'  Your brother says you have recently gained full-time employment and are determined to move in a positive direction with your life.  To his knowledge, you no longer gamble and he states you are extremely remorseful for your conduct. 

22As indicated by your brother, in 2017 you obtained further employment in an accountant physician, first with Metrowide Cleaning for 18 months and then with Stilcon Scaffolding for a further 18 months.  You resigned from that role in February 2020 to assist your daughter establish a food services business.  Since May 2021, you have been employed in an accounts role with Trent Refrigeration. 

23I turn now to your mental health.  In the opinion of Mr Cummins, you were suffering from a gambling disorder (DSMIV) at the time you misappropriated funds from Cubic Solutions and at the time of your offending.  You told Mr Cummins you last gambled in mid-2019 and, on that basis, he states your gambling disorder is now in sustained remission.  Prior to this, Mr Cummins says you made repeated efforts to stop gambling but continued to gamble to, 'Chase her losses in attempts to have a big win.'  Although you spoke to your GP about your gambling problems and received two mental health care plans, you never sought treatment for your addiction because you felt ashamed. 

24

Having undertaken additional testing, Mr Cummins diagnosed you as suffering from a major depressive disorder in addition to symptoms of anxiety and trauma, the trauma primarily arising from the fact of these charges.  In Mr Cummins' opinion, the symptoms of major depressive disorder of moderate severity and with associated suicidal ideation were first experienced by you in the months prior to Cubic Solutions confronting you regarding the misappropriated funds in

June 2015.  Mr Cummins states that your major depressive disorder was exacerbated in the following way:

'The symptoms of the major depressive disorder have thereafter been exacerbated in the context of her attempts to repay misappropriated funds by borrowing other moneys from friends, including so-called gambling friends, and other financial institutions in an attempt to have one or more big wins through gambling so she could repay more of the moneys which she'd misappropriated from Cubic Solutions Pty Ltd.'

25It is apparent from Mr Cummins' assessment that as your gambling addiction took hold, your financial situation began to spiral out of control.  Rather than seeking professional help and assistance for your gambling addiction and depression, you continued to gamble in the forlorn hope that future winnings would solve your financial problems.  Sensibly, Mr Cummins is of the opinion you would benefit from a trial of anti-depressant medication and receipt of ongoing mental health treatment to address your symptoms of anxiety and depression. 

Offence gravity

26I turn now to discuss the nature and gravity of the offending. 

27In 2010, s266(1) and (3) of the Act were amended by the Bankruptcy Legislation Amendment Act 2010 (Cth) to increase the maximum penalty from three years to five years’ imprisonment. In doing so, Parliament sought to reflect the seriousness of these offences, where each involves an intent to defraud in the context of bankruptcy. The offence of disposing of property with intent to defraud creditors is a serious dishonesty offence. The maximum penalty is one means by which the gravity of these offences is gaged.

28In this case, your offending was repeated and sustained over a period of six months.  It demonstrates a degree of pre-planning.  The sum of $149,755 that you disposed of over that period was significant in the context of the total debt owed to your former employer.  As a person with accounting qualifications, you would have been aware of your bankruptcy obligations. 

29You are not charged with any offending arising from the alleged fraud or theft from Cubic Solutions.  It is not an aggravating feature of your offending.  Its relevance arises from the fact that you disposed of various large sums of money with the intention to defraud Cubic Solutions in the context of a court ordered default judgment for $1.4m proceeding your bankruptcy. 

30The summary offences, whilst carrying a lower maximum penalty of one year, are also serious instances of these offences.  Knowingly making a false declaration on your statement of affairs (Summary Charge 10) undermines the ability of the trustee to manage and recover assets on behalf of the creditor.  So too does your failure to advise the trustee of your winnings totalling 61,000 in February 2019 that is the basis of Summary Charge 11.  By your conduct in subsequently disposing of 45,000 of that sum, you blatantly disregarded your obligation to repay your creditor and frustrated the attempts of the trustee to trace and recover funds on behalf of the creditor. 

Sentencing considerations

31As the charges to which you have pleaded guilty are Commonwealth offences, I am required to take into account a number of matters pursuant to s16(a) of the Crimes Act 1914 (Cth). In written submissions, both counsel highlighted matters they submit should be given weight in the sentence I impose.

32First and significantly, is your plea of guilty.  You were charged in September 2020 and elected to proceed to the County Court without a contested committal hearing in November 2020.  The charges resolved to a plea following a sentence indication hearing on 2 August 2021.  Your please at this early stage in the proceedings has avoided what would have been a lengthy and complex jury trial and has saved witnesses from having to give evidence.  Your plea, therefore, has significant utilitarian value and carries greater weight in the current circumstances where the court is burdened by delays in the wake of the pandemic.  I have regard to your willingness to facilitate the court of justice in moderating the sentence I impose. 

33

Assessing your level of remorse and acceptance of responsibility for your offending is more difficult.  In his reference, your brother states that you are extremely remorseful for your conduct.  When interviewed by Mr Cummins, you expressed embarrassment and shame for your gambling addiction and stress in relation to the prospect of imprisonment.  However, you demonstrated little insight or remorse for your offending in the context of your bankruptcy obligations. 

Mr Cummins states this is reflective of your avoidant personality style.  I accept this opinion.  It possibly explains the fact that, despite two referrals for mental health treatment, you did not take up the opportunity to obtain treatment for your mental health condition and gambling addiction in the community.  The fact remains that you have not taken any subsequent steps to co-operate with the trustee or made reparation for the payment of the amounts disposed of or owed to the creditor. 

34Although this is not an aggravating feature of the offending, there is no foundation upon which I can find, beyond the plea, that you have accepted full responsibility or express genuine contrition for your offending.  This finding does not, however, undermine the significant utility of your plea.  The major depressive disorder and gambling disorder diagnosed by Mr Cummins and existing at the time of the offending, are also relevant to the sentence I impose.  Undoubtably, these conditions were significant in the context of your offending behaviour and I have taken that into account in sentencing you.  However, there is no evidentiary foundation for me to conclude there was a causal link between these disorders and your offending against the Bankruptcy Act. 

35This was conceded by counsel appearing on your behalf, Mr Gipp.  While your mental health condition at the time is relevant in mitigation of sentence, it does not operate to reduce your moral culpability for your offending in accordance with the authority of Verdins or the need for the sentence to operate to deter others.  Your mental health is, however, relevant to other matters, including my assessment of your prospects of rehabilitation to which I now turn. 

36In my view, a number of factors are relevant to your prospects of rehabilitation.   First, at the age of 48 you have no prior criminal history.  Your previous good character, as reflected in the reference provided by your brother, entitles you to some leniency.  You have a lengthy employment history, working in positions of trust without incident. 

37Indeed, since this offending, you have continued to secure employment in accounting roles.  You have not reoffended since 2019.  Despite receiving no treatment or counselling, Mr Cummins has assessed your diagnosed gambling disorder as being in sustained remission.  Whilst your lack of insight suggests of rehabilitation should be viewed with some caution, provided you engaged in ongoing psychological treatment to address you gambling addiction and depression, I consider your prospects of rehabilitation to be positive.

38In cases such as these, generally deterrence is the paramount sentencing consideration.  As  the prosecutor Mr Ringwaldt highlighted, the bankruptcy system in Australia operates for the benefit of those with no reasonable prospect of repaying their debts.  To some degree, it operates on the honesty of those claiming to be bankrupt.  The integrity of the bankruptcy system is undermined by offending such as this and in failing to make full and complete disclosure of information to the trustee.  In sentencing you, I must deter others who obtained the benefit of bankruptcy, from hindering the work of the trustee and disposing of assets intending to defraud their creditors.  Denunciation of your conduct is also a relevant sentencing consideration. 

39Although I do not have the benefit of information regarding the circumstances of the victim Cubic Solution, it is not disputed by your counsel that it was a private company specialising in drainage solutions and one without the resources of larger corporate creditors or institutions to recover its bets.  Given the quantum of the amount disposed of and the repeated nature of your offending over the six-month period, I consider that specific deterrence also has a role to play in sentencing you.

40The prosecution provided me with one comparable case from an intermediate appellate court and one of an intermediate court. Whilst these may serve as a useful yardstick, there are limitations on the utility of comparable cases. Section 16A of the Crimes Act 1914 (Cth) requires me to impose a sentence that is of a severity appropriate in all the circumstances. I have considered the submissions made by Mr Gipp that a lengthy community correction order could meet all the relevant sentencing considerations in your case. Despite the fact a term of imprisonment is a sentence of last resort, and notwithstanding the matters put by Mr Gipp in mitigation, I am satisfied that no sentence other than imprisonment is appropriate to reflect the nature and gravity of your offending.

41However, the matters in mitigation lead me to conclude it is appropriate to support your future rehabilitation under the conditions of a recognisance release order.  I have also taken into account the fact that the conditions in custody have been modified to respond to the COVID-19 pandemic, including periods in lockdown and the suspension of face-to-face visits with family.  For you, as a first-time offender, these limitations will add to the burden and isolation of your imprisonment and I have taken this into account in moderating the custodial component of your sentence. 

42Although each charge represents a separate and discrete offence, I accept there is considerable overlap in the nature of the offences and that the sentencing principle of totality applies in determining appropriate periods of concurrency and cumulation in respect of the individual sentences I impose. 

43Ms Luong, please stand. 

Sentence

44Taking into account the matters to which I have referred and having regard to the maximum penalty for each offence, I sentence you as follows:

·     Charge 1, you are convicted and sentenced to five months’ imprisonment.

·     Charge 2, you are convicted and sentenced to two months’ imprisonment.

·     Charge 3, you are convicted and sentenced to three months’ imprisonment.

·     Charge 4, you are convicted and sentenced to seven months’ imprisonment.

·     Charge 5, you are convicted and sentenced to seven months’ imprisonment.

·     Charge 6, you are convicted and sentenced to eight months’ imprisonment.

·     Charge 7, you are convicted and sentenced to four months’ imprisonment.

·     Charge 8, you are convicted and sentenced to six months’ imprisonment.

·     Charge 9, you are convicted and sentenced to three months’ imprisonment.

·     Charge 10, you are convicted and sentenced to 14 months’ imprisonment.

45In relation to the summary offences, you are convicted and sentences as follows:

·     Summary Charge 10, you are convicted and sentenced to five months’ imprisonment.

·     Summary Charge 11, you are convicted and sentenced to six months’ imprisonment

·     Summary Charge 13, you are convicted and sentenced to three months’ imprisonment.

46The sentence of 14 months imposed on Charge 10 is the base sentence and commences this day, 1 October 2021.  The sentences imposed on Charges 1, 2, 3, 7, 8, and 9 are to be served concurrently with the sentence imposed on Charge 10 and each sentence also commences this day, 1 October 2021. 

47The sentence of seven months imposed on Charge 4 is to commence five months before the expiry of the sentence imposed on Charge 10 with two months to be served cumulatively.  The sentence of seven months imposed on Charge 5 is to commence five months before the expiry of the sentence imposed on Charge 4 with two months to be served cumulatively.  The sentence of nine months imposed on Charge 6 is to commence five months before the expiry of the sentence imposed on Charge 5 with four months cumulative.  The sentence of six months imposed on Summary Charge 11 is to commence four months before the expire of the sentence imposed on Charge 6 with two months cumulative.

48This gives a total affective sentence of 24 months imprisonment. Pursuant to s20(1)(b) of the Crimes Act 1914 (Cth), you are to be released after serving five months of the sentence of imprisonment upon you giving security by way of recognisance in the sum of $4000 to comply with the following conditions:

·     that you be of good behaviour for a period of three years;

·     that you participate in an assessment by a registered psychologist in relation to your diagnosed depressive disorder and your gambling disorder, now in remission and, if assessed as necessary, undertake such treatment and counselling as recommended for a period of two years. 

49Ms Luong, you must understand that if, during the period in which this order operates - that is, three years from today - you are not of good behaviour, you may be brought back before me and deal with, which may include being ordered to serve a further period in prison and you may forfeit the $4000. 

50I note that no application for restitution has been made by the prosecution and, accordingly, no order is made.  Ms Luong, please have a seat. 

51Mr Gipp, are there custody management issues that you wish to be noted?  I note the reference to the various medications. 

52MR GIPP:  Your Honour, I have two reports from her GPs which I provided to the custodians and I provided to the prosecution, but perhaps I could ask that it be placed on the court file, Your Honour.

53HER HONOUR:  Yes.

54MR GIPP:  It just lists the medications to address the issues that have been referred to in the plea.

55HER HONOUR:  All right, thank you.  We will also ensure that they make their way through to Corrections and are added to the record.  Thank you. 

56MR GIPP:  Yes, thank you, Your Honour.  Those are the only custody issues, Your Honour.

57HER HONOUR:  Thank you.  Are there any other matters either counsel wish to raise?

58MR GIPP:  No.

59MR RINGWALDT:  Nothing arising, Your Honour. 

60HER HONOUR:  Can I thank counsel for their assistance.  Please adjourn the court. 

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