Director of Public Prosecutions v McDonald

[2014] VCC 2095

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

AT MELBOURNE
CRIMINAL JURISDICTION

CR 14-01542

DIRECTOR OF PUBLIC PROSECUTIONS (CTH)

v

KERRY MCDONALD

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JUDGE:	HIS HONOUR JUDGE PARSONS
WHERE HELD:	Melbourne
DATE OF HEARING:	1,4 December 2014
DATE OF SENTENCE:	5 December 2014
CASE MAY BE CITED AS:	DPP v MCDONALD
MEDIUM NEUTRAL CITATION:	[2014] VCC 2095

REASONS FOR SENTENCE
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Subject:
Catchwords:
Legislation Cited:
Cases Cited:
Sentence:

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Mr S Young	CDPP
For the Accused	Mr R Gipp	Simon Nixon & Associates

HIS HONOUR:

1You, Kerry John McDonald, have pleaded guilty to one count of dishonestly obtaining a financial advantage by deception by a Commonwealth entity.  You have also pleaded guilty to one count of attempting to dishonestly obtain a financial advantage by deception from a Commonwealth entity.

2The circumstances of your offending have been outlined in significant detail by Mr Young, who appears on behalf of the prosecution, and that document is an exhibit before me.

3By way of background.  At the time of these offences, the Department of Education Employment and Workplace Relations was a Department of State under the Australian Constitution, and the matters in respect of which, (I will refer to it as DEEWR) had responsibility, are detailed in the Crown opening.

4DEEWR administered was a program called "General Employee Entitlements Redundancy Scheme", otherwise known as GEERS.  That program is a safety net program that provides assistance to employees who lose their job as a result of their employer entering liquidation or bankruptcy.

5Under that program, claimants may be eligible to receive assistance for up to three months unpaid wages, unpaid long service leave, unpaid annual leave, and up to five weeks pay in lieu of notice and capped amounts for redundancy pay.

6With respect to Charge 2 concerning you Mr McDonald, this charge relates to a claim for GEERS assistance submitted to DWEER in the name of Adam David Stoodley, in respect of unpaid entitlements accrued in the course of the claimant's employment with a company known as Mcsarge Proprietary Limited.  That company was involved in construction and installation of verandas and pergolas. 

7The relevant background of the claim is set out in the opening and I will not repeat.  In the claim form, there was a claim made for 22 weeks wages in the sum of approximately $32,000, four weeks annual leave in the sum of approximately $6,000, four weeks annual leave loading in the sum of approximately $1,000, and two weeks of pay in lieu of notice in the sum of approximately $3,000, totalling precisely $41,394.21.  A signed declaration on p.12 of the form purportedly in the name of Adam Stoodley, indicated that the information in the form was true and correct.  Various supporting pieces of documentation accompanied that GEERS claim.

8In due course, a decision was made that the claimant was ineligible for assistance on the ground, that his employment had been terminated more than six months before the appointment of the insolvency practitioners. 

9Subsequently, further documentation was provided, and that is particularised in the opening with a request that the claim be continued.  In due course, a fax from the firm of Andrew Dunner & Associates, which set out a verification statement was forwarded to the department, in which the various matters were confirmed, and they are highlighted in Paragraph 17 of the opening.

10On 16 June 2011, the review of the GEERS claim in the name of Adam Stoodley was concluded.  The determination was made based upon the verification from the insolvency practitioner as to the termination date of the claimant's employment, and the claimant's outstanding entitlements that he was eligible for GEERS' assistance.

11By letter dated 20 June 2011, payment for Adam Stoodley in the sum of $27,103.88 was paid by DWEER.  An additional payment was made to Andrew Dunner & Associates for the provision of services in relation to the claimant of approximately $670.  It was the Crown case that the claim for GEERS' assistance in the name of Adam Stoodley was prepared by David Stoodley, and signed by him.

12The information provided in the claim form as to Adam Stoodley's employment with McSarge Proprietary Limited and as to outstanding entitlements was completely false.  Adam Stoodley had in fact never been employed by McSarge Proprietary Limited.

13The letter of appointment forwarded to DWEER in support of the Adam Stoodley claim was also a complete fabrication, and that was signed by you Mr McDonald, in the name of your wife Gayle McDonald.

14Further communications by mail, telephone and email purporting to be from Adam Stoodley, following the initial lodgement of the claim in his name were in fact made by David Stoodley, representing himself as the claimant.  In fact Mr Stoodley was the recipient of the sum of $18,773 from the GEERS' payment made in his son's name.  He had no entitlement to the monies.

15With regard to the attempt charge concerning you Mr McDonald, by a letter dated 26 July 2011 from Andrew Dunner & Associates, a further 15 claims for GEERS' assistance were submitted to the department in the name of persons said to have been employed by McSarge Proprietary Limited.  The amount claimed by way of outstanding entitlements in these GEERS' forms totalled $469,053.

16At this time, a DWEER officer received information that Mr McDonald and a co-accused Mr Andrew Dunner were submitting false GEERS' claims.  As a result, DWEER engaged independent consultants to make an assessment of the outstanding 15 McSarge claims.

17In due course, on 29 November 2012, you, Mr McDonald, participated in a formal record of interview with DWEER investigators.  During that interview, you made full admissions to having prepared the false GEERS claims, with the exception of the Adam Stoodley claim and having prepared false supporting documentation for those claims namely contracts of employment, and letters of termination, both of which you signed in your wife's name and also payslips which you created using the MYOB Program.

18You stated that you supplied the false documentation to the liquidator Andrew Dunner who sent it off to GEERS.  You further admitted having prepared false supporting documentation for the Adam Stoodley claim.  In addition to those matters, you say that you were told about the GEERS program by David Stoodley when you were doing work on his house, and that Stoodley referred you to Andrew Dunner & Associates.  It was Stoodley who told you how to make fraudulent GEERS claims.  You, Mr McDonald, also said that Dunner was to get 10 per cent of the amount claimed and that you were also to get 10 per cent.

19Of course you were co-operative at that early stage and offered through your legal representatives to make a statement as to your own involvement, and the involvement of other participants in the subject offending, and to give evidence in any proceedings brought against the other participants, and I will refer to that matter in a moment.

20On 6 March 2013, you made a statement, aspects of which are summarised in Paragraph 38 of the opening.  You then made two further supplementary statements in relation to the prosecution of the co-accused in this matter. 

21You and Mr Stoodley were originally charged on summons on 23 May 2014.  You were originally charged with one charge of aid and abet, obtaining a financial advantage by deception and 15 charges of attempting to obtain a financial advantage by deception.  In due course, and prior to the committal, it was agreed that the first attempt charge would be amended to a rolled up charge, encompassing all of the false claim forms originally the subject of the 15 separate attempt charges, and the other 14 attempt charges would be withdrawn.

22Accordingly, the charges to which you pleaded guilty at committal mention on 1 September 2014 were the same two charges as those relating to you on the present indictment.  There are no victim impact statements provided in the matter.

23As was pointed out by your counsel, there are a number of mitigating factors.  You have pleaded guilty, and you are entitled to have that fact taken into account in your favour and I will do so.  The community has no doubt been spared the time and cost of a trial by your pleas.  The witnesses have been spared the ordeal of giving evidence upon your trial, and I can tell you the sentence I intend to impose is far less than would have been imposed, had you been found guilty after a trial.

24Further, I take it into account in your favour, that you intimated early, your pleas of guilty.  There was a ready admission of your part in the crime once it was discovered, and I accept in your case, that your plea does indicate true remorse for your actions.

25I have been told something of your personal history, and your circumstances and propose to summarise that in broad.  You Kerry McDonald are 54 years of age, your personal history is summarised in Exhibit 5 which is the outline of submissions made by counsel on your behalf.  More particularly, your background is set out in the report prepared by Dr Danny Sullivan on your behalf dated 27 October 2014, and I propose to generally summarise those matters.

26You were born in Hobart into a relatively impoverished family.  You are somewhat estranged from your father, in circumstances which are there set out.  Your mother's second partner died recently, and it was clear that you were attached to him.

27After some early movement between schools, you left school at the age of 15 and moved to Melbourne, as did your brother and sister.  You worked initially loading trucks on the docks, before you joined the Victorian Railways and then the Royal Army Medical Corp.  Your work history is there set out.

28In more recent years, you set up a small business installing security alarms which you sold to another business that installs security doors.  You worked as a sales manager, and then developed your own security door business with partners.  That went into administration and you then set up another similar business and more recently had a business building patios which you described as a separate sideline.

29Given your current situation, you passed the running of the business over to your son and you are now employed by him.  You and your wife have sold your house and you now live in rented accommodation.  You have two children.  Your medical history and current situation and medication are set out.  You explained the situation surrounding your offending as at a time when you were financially stressed, somewhat overwhelmed with work, and struggling with the pressure of having to sack people and make big financial decisions.

30It was the opinion of the author that you would satisfy a diagnosis of major depressive disorder, mild in severity, and that you would meet a diagnosis of alcohol dependence.  In addition, there are character testimonials from people who have known you for a long time, and clearly your behaviour is out of character as far as they are concerned.  You have been in no further trouble since this matter, and I am on balance satisfied the chances of your rehabilitation are very positive, given the way you have chosen to assist the authorities with respect to this matter.

31Further, you have pleaded guilty at the earliest stage, and demonstrated your remorse in a most compelling way.  I accept the characterisation of your offending as set out in the opening, to which no exception was taken by counsel on your behalf.  Of course, with respect to your co-operation with the authorities, your promise, of future co-operation will be additionally, and separately recognised in the sentencing, and I agree with the submission that entitles you to a significant sentencing discount.

32You have co-operated in a way which was characterised by the prosecution as being of substantial assistance.  You are a very important witness, and what you have to say and what you have done is highly valuable.  There is the past co-operation and future co-operation, and those matters are addressed in submissions made on your behalf, in a way that I accept in Exhibit 5.

33Further, I was provided with a copy of the decision in DDP Commonwealth v Cauper, 2013 VSCA 72, dated 10 April 2013, and particular referred to Paragraph 144 and forward.  In this regard, I was also provided with the decision of R v Johnson, 2008 VSCA 133 dated 29 July 2008.

34Further of course, I have the evidence that you gave when you swore to co-operate with the prosecution authorities and the materials that were tendered which comprise your undertaking to co-operate as well as the three various statements.

35As well as those matters personal to you, to which I have referred including the question of rehabilitation, I must take into account such matters as deterrence, and clearly general deterrence is of significance in matters such as these, involving as it does a sophisticated fraud of a Commonwealth revenue over a period of time, involving the payment of a not inconsiderable amount of money, and certainly the attempt to procure an even greater sum.

36It was only when the matters came to light that you chose to make full disclosures to the authorities, once these matters were uncovered.  With respect to the issue of specific deterrence, in your circumstances Mr McDonald of course, you have reached a reasonably advanced stage without any prior convictions.

37Delay has been an issue of some concern, and indeed two chronologies were tendered before me which fully set out the relevant detail of the matter.  Of course until such time as these matters were drawn to the attention of the authorities, it was no doubt the hope of each of you, that you got away with your crimes.

38However from that time, as was disclosed in the chronology helpfully prepared by counsel, which is Exhibit 4, I have no doubt that the passing of the time has resulted in significant anxiety being occasioned to you, given the possibility of a term of imprisonment.  I have no doubt with respect to you, that you have utilised that time to affect your rehabilitation in the way that has been described, in particular by assisting authorities in the way you have.  And of course in that circumstance, you derive the benefit of the delay as directed by the relevant sentencing authorities.

39Yes, Mr McDonald if you would stand please.  These are without doubt serious offences, and in all the circumstance, I have no alternative to the imposition of custodial sentences.  You are convicted and sentenced as follows.

40On Charge 2 on the indictment, four months imprisonment to begin today, 5 December 2012.  On Charge 3 on the indictment, 12 months' imprisonment which sentence will also begin today, 5 December.  Now as to that matter, there is no difficulty gentlemen.  That is, I can order them fully concurrent? 

41MR YOUNG:  You can, Your Honour.

42MR GIPP:  I think on Charge 2 you mentioned the date - prior December 2012, Your Honour.

43HIS HONOUR:  Thank you.  I meant, 14.  The total effective sentence is therefore 12 months, and that period of imprisonment commences today, 5 December 2014.  However in the circumstances, the court orders your immediate release upon you giving security, by recognisance, in the sum of $1,000 to be of good behaviour for a period of two years which commences today, 5 December 2014.

44Now as to the sentencing discounts, firstly with respect to s.21(e), your undertaking to co-operate, but for your undertaking to co-operate, pursuant to s.21(e) of the Crimes Act, I would have added 15 months to the total effective sentence of 12 months. The sentence I would have therefore imposed, but for the reduction given by reason of your undertaking to co-operate would have been two years and three months.

45Secondly, with respect to s.6AAA, a plea of guilty.  Putting aside the sentence I would have imposed, but for your undertaking to co-operate, I now turn to the discount I have given you for your plea of guilty.  But for that plea of guilty, I would have added to the sentence in fact imposed of 12 months, a further six months imprisonment, and that would have resulted in a sentence of 18 months.

46In summary therefore, the undiscounted sentence would have been a total of 33 months, deducting the s.21(e) discount of 15 months and then deducting the s.6AAA discount of six months, leaves a total effective sentence of 12 months.

47Now I am required to explain to you the purpose and consequence of the recognisance release order.  You will today be released into the community and by that document, you will have promised to be of good behaviour for a period of two years.  If you commit any further offence in that time, you will be in breach of your promise to the court.

48You do not have to pay the $1,000, but you may have to if you breach your promise by further offending in the next two years.  If you do commit another offence in the next two years, you will be brought back to this court for re-sentencing, and you will be at risk of gaol and also of losing the $1,000.

49Also of course, in addition to that, I am required to explain or cause to explain to you the consequences of breaching your undertaking to the court with respect to your giving evidence and co-operating, and as to those matters of course, you have already had that put to you by Mr Young accurately in my view, when he cross-examined, and Mr Gipp your counsel of many years standing, as explained to you, and also the consequences of that breach and in the circumstances, I think it is better done by them.  All right, thank you Mr McDonald if you would be seated please.

50MR YOUNG:  In those circumstances then, Your Honour is required under subsection 5 to state the reasons for taking that course ‑ and to cause those to be entered in the records of the court.

51HIS HONOUR:  Yes.  The reasons for adopting that approach was simply to reflect the age and circumstances of Mr McDonald, who it seems to me is somebody who is extremely unlikely to re-offend in the future, given as I say, his age and circumstances, and I took the view that a recognisance release order in his circumstances, would be unnecessary.

52MR YOUNG:  And would that also flow Your Honour, through to the sentence that would've been imposed, but for the undertaking to co-operate?

53HIS HONOUR:  Yes, yes.

54MR YOUNG:  So no ‑ ‑ ‑

55HIS HONOUR:  The situation is, if he hadn't pleaded guilty, and if he hadn't assisted the authorities and being convicted of these offences, the sentence would have been a straight 33 months imprisonment.

56MR YOUNG:  Yes, I understand.

57HIS HONOUR:  Yes.  And as I say, the reasons for that are - in the circumstances, a man of his position and age it appeared to me that a recognisance release order was unnecessary.  I think he's well and truly learned his lesson.  I think it unlikely he'll ever offend again.

58MR YOUNG:  Your Honour pleases.  Your Honour, the form has been completed.

59MR GIPP:  Yes, in this form that I've been handed under the Schedule Your Honour, for ordering recognisance under Paragraph 21(B), it's a requirement for Mr McDonald to sign the document that he understands the nature of the order that's been made.

60HIS HONOUR:  Yes.

61MR GIPP:  Can I have a moment to approach my client, Your Honour?

62HIS HONOUR:  Yes indeed, thank you.

63MR GIPP:  I'm told Your Honour that there's a provision in relation to the order that Your Honour needs to sign before I speak to my client.

64HIS HONOUR:  Yes, all right.  Yes indeed.

65MR YOUNG:  And Your Honour, once that's been signed, the order has been signed by yourself, then it has to be signed by Mr McDonald, and his signature witnessed by Your Honour's associate.

66HIS HONOUR:  Yes, thank you.  Yes, thank you Mr Gipp, if you'd attend upon Mr McDonald in that way.

67MR GIPP:  Yes thank you, Your Honour.  That's been done.

68HIS HONOUR:  All right, thank you.  All right Mr McDonald, thank you officer Mr McDonald can step forward.  Thank you.  All right Mr McDonald, I think that's all.

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