DPP v Caulfield
[2019] VSCA 131
•14 June 2019
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCR 2019 0012
| DIRECTOR OF PUBLIC PROSECUTIONS | Appellant |
| v | |
| KERRY CAULFIELD | Respondent |
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| JUDGES: | PRIEST, KAYE and WEINBERG JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 12 June 2019 |
| DATE OF JUDGMENT: | 14 June 2019 |
| MEDIUM NEUTRAL CITATION: | [2019] VSCA 131 |
| JUDGMENT APPEALED FROM: | DPP v Caulfield [2018] VCC 2213 (Judge Cohen) |
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CRIMINAL LAW – Sentence – Director’s appeal – Plea of guilty to theft from employer – Respondent sentenced to total effective sentence of 9 months’ imprisonment and 2 year Community Correction Order with conditions – Whether sentence manifestly inadequate – Prolonged offending – More than $460,000 taken from employer – Concealment of offending – Abuse of trust – ‘Rolled-up’ charge – Early plea – Admission and cooperation with investigators – Genuine remorse – Whether Court should exercise residual discretion – DPP v Bulfin [1998] 4 VR 114, Dyason v The Queen (2015) 251 A Crim R 366 considered – Appeal allowed – Respondent resentenced to 2 years and 6 months’ imprisonment – Non-parole period of 18 months.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant: | Ms K E Judd QC, Director of Public Prosecutions with Ms A Ellis | Mr J Cain, Solicitor for Public Prosecutions |
| For the Respondent: | Mr T Kassimatis QC with Ms R Avis | James Dowsley & Associates |
PRIEST JA
KAYE JA
WEINBERG JA:
On 28 November 2018 the respondent pleaded guilty, in the County Court at Melbourne, to a single ‘rolled-up’ charge of theft. She was sentenced on 20 December 2018 as follows:
Charge on Indictment Offence Maximum Sentence Cumulation 1. Theft
[s.74(1) Crimes Act 1958]
10 years’ imprisonment 9 months’ imprisonment and a 2 year Community Correction Order N/A Total Effective Sentence: 9 months’ imprisonment and a 2 year Community Correction Order with special conditions:
· 50 hours of unpaid community work;
· Supervision;
· Mental health assessment and treatment; and
· Attend a program or programs to reduce the risk of re-offending.
Non-Parole Period: N/A (1) of the Sentencing Act 1991Pre-Sentence detention declaration pursuant to s 18: Nil S. 6AAA Sentencing Act 1991 declaration 3 years’ imprisonment with a non-parole period of 2 years Other relevant order: Forensic sample order Ground of appeal
By notice filed on 17 January 2019, the Director of Public Prosecutions has appealed against this sentence on the following ground:
Ground 1: The sentence imposed is manifestly inadequate.
Particulars
The sentence reflects that the learned sentencing judge:
(a)Failed properly to consider the objective gravity of the offending conduct;
(b)Failed to give sufficient weight to the sentencing principles of just punishment, denunciation, general deterrence and specific deterrence;
(c)Gave too much weight to mitigating factors concerning the offender; and
(d)Failed to give sufficient weight to the maximum penalty for the offence.
Background facts
The offending took place over a period of three years, commencing in February 2015 and continuing through to February 2018. During that period, the respondent stole a total of $463,028.80 from her employer, Hopper Motor Group (‘the company’). She was aged between 45 and 48 at the time of the offending.
There were 84 separate acts of theft which comprised the charge period. During that period, the respondent falsified details of transactions, including by creating false accounting documents, in order to conceal her conduct.
The respondent had been employed by the company for 16 years. At the time of the offending, her role was essentially that of a book keeper, and involved administrative and accounting tasks. These included banking, debtor management and payroll administration. More particularly, she was responsible for collecting and collating funds for banking, recording and maintaining a transaction ledger, and reconciling banking to the documents that she prepared. She also had access to four safes where funds from sales were kept. It was her responsibility to bank the funds once received.
The company’s transaction ledger was contained within a computer system. The amounts recorded on any given day on the company’s general ledger, banking sheet, and bank listing were all required to reconcile.
During the offending period, the respondent undertook a number of steps to perpetrate the individual thefts. These included falsifying ledger entries, failing to account for funds received, and altering the formulae and appearance of the spreadsheet within the computer system so that the details of the fabricated transactions would not be apparent to others. According to the sentencing judge, on a monthly basis, the amount of money taken by the respondent varied from $1,000 to $21,000.
On subsequent investigation, the methods used by the respondent were noted as being unsophisticated. It was accepted that analysis of the relevant documents would readily have revealed discrepancies.
In January 2018, the company appointed a new Chief Financial Officer (‘CFO’). On 22 February 2018, the CFO had a conversation with the respondent regarding the company accounts. The respondent realised that her offending would be detected, and immediately took sick leave. On 8 March 2018, she resigned from the company.
On 22 March 2018, the company engaged an accounting and advisory firm to assist in analysing and investigating the accounts. Wayne Gladman of the firm, conducted the investigation. It was during this time that the full extent of the respondent’s offending became apparent.
On 9 April 2018, Mr Gladman had a conversation with the respondent outside her home. During that conversation, she admitted to having stolen money from the company.
On both 12 April and 19 April 2018, the respondent was interviewed at the offices of the firm. During the course of those interviews, the investigating accountants put details of each individual transaction at issue to her. She made admissions about her conduct and signed a document acknowledging the details of each act of theft.
On 10 June 2018, Victoria Police interviewed the respondent. She made a number of admissions. She acknowledged that she had stolen cash and manipulated the company’s books to create the appearance of the relevant funds having been banked. She revealed that she had a gambling problem, and claimed that she took the money ‘intending always to give it back’. She said that of the money stolen, 90 per cent had been used for gambling.
The admissions made during the course of the record of interview revealed that the offending was opportunistic, and had spiralled quickly out of control. This is illustrated by the following quote:
So if I got the banking out and there was, say a $500 deposit, then I just wouldn’t record that for the day … I would use that money ... take it, gamble with the intent to try and win obviously to pay whatever I needed to pay or to pay that back the next day. So if that didn’t happen, then the next day I would use another one to cover that one … obviously as it progressed, the amounts got bigger … and the problem got bigger.
The respondent’s expressions of remorse were qualified. She said during the interview that ‘I ultimately knew it was wrong … some days I didn’t care. Some days [I] cared but couldn’t do anything about it …’
Following that police interview, the respondent was charged. She has not repaid any of the money that was stolen, and is plainly unable to do so.
Personal factors
At the time the respondent came to be sentenced, she was aged 49. During the course of the plea, it was said that her father had been an alcoholic, and had been abusive towards her during her youth.
At the time of the plea, the respondent’s father was terminally ill. By the time she came to be sentenced, he had died. It was said that the respondent was the primary carer for her mother, who was of advanced age. The respondent’s two adult daughters and grandchild were living at her home throughout most of the week.
It was said on the plea that the respondent had suffered behavioural problems as a child. She had difficulty at school and left at the age of 15. She subsequently worked at various hospitality jobs until she turned 19, when she began to work in office administration and accounts.
As indicated, the respondent has two adult daughters. She was in a relationship with their father for some six years. After they separated, they remained on good terms and maintained contact.
In 2012, the respondent married another man whom she had known for about eight months. There were tensions between him and the respondent’s mother and daughters. He was said to be emotionally controlling. The difficulties with the marriage were said to have contributed to, and exacerbated, the respondent’s long-term problem with gambling.
In 2014, the respondent’s former partner died. This was said to have been particularly traumatic for the respondent, as she had discovered his body. She had also faced the difficulty of having to convey the news of their father’s death to her daughters.
The respondent’s marriage ended in 2016. However, that did not seem to affect her gambling habits or offending, with both continuing for over 12 months after that time.
During the course of the plea, the respondent maintained that she was deeply sorry for her actions. She expressed shame and embarrassment for what she had done. She had no prior criminal history. Her sister-in-law and two daughters were present in court throughout the plea. All three provided written character references for her.
Sentencing remarks
The judge correctly noted from the outset that the maximum penalty of 10 years’ imprisonment covered a wide range of conduct.[1] While the amount taken, some $460,000, was not among the very largest thefts to come before the courts in offences of this kind, it was substantial. That amount, as well as the number of individual acts of theft, the period over which the offending took place, and the respondent’s attempts to conceal her actions rendered her conduct an ‘objectively serious instance of theft.’[2] Her Honour also specifically noted that the respondent had not repaid any of the money taken throughout the period of the offending.
[1]DPP v Caulfield [2018] VCC 2213 (Judge Cohen) (‘Reasons’) [6].
[2]Reasons [7].
The victim impact statement
One of the owners of the company, which was a family-owned and run business, read a victim impact statement in court. She said that she and her brother had taken it over from their father. They had over 200 employees, most of whom had been with them for a very long time. She described them as being ‘like family’.
She said that the respondent was one of the very treasured employees and described her as a ‘dear friend’. She said that it was hard to put into writing how deeply the impact had been of having a friend and colleague steal from the company, especially knowing that she had been aware throughout of how tough things were in business for them, and had been for some time. She said that she was devastated to think that someone who she had trusted would be prepared to put everything that her family and she had worked for over the past 50 years in jeopardy.
She said that since discovering what the respondent had done, she had been physically ill, which she attributed to a compromised immunity and high levels of stress. Her blood pressure was ‘out of control’, and her doctor had expressed concern for both her physical and emotional state. She was seeing a psychologist in an effort to alleviate her problems.
She said that emotionally, the respondent’s actions had put enormous strain on herself and her family. She referred to the immense pressure of trying to recover financially from such a significant theft in a tough business climate. This had led to poor sleep and less time with her family. She described herself as being ‘sick to her stomach’ and as experiencing panic attacks. She added that this had put a massive strain on herself and staff across the entire company, all of whom were unsure of the future. As the owner of the business, she had had to wear that burden both physically and emotionally.
She spoke of the emotional toll of having to make staff redundant, and to ask staff to consider cuts across the entire company. She said that her relationship with friends had been affected, and she had found it impossible to shelter her young children from the stress of what had occurred. She concluded by saying that the respondent’s offending had put the entire business seriously at risk, and endangered all of her assets.
Making due allowance for the obligation to ensure that a victim impact statement is not given more weight than it should properly bear, this was a powerful factor, demonstrating just how serious an impact the respondent’s offending had had upon the company, and its owners.
The sentencing synthesis
The judge recognised the importance of general deterrence and denunciation in arriving at an appropriate sentence. Importantly, her Honour found that the respondent must have appreciated, at least in general terms, the value of the amounts taken over the offending period, even if she did not know the exact figure.[3]
[3]Reasons [29].
The judge correctly observed that stealing from an employer by whom the respondent had been entrusted with access to the bank accounts was a ‘huge betrayal of trust.’[4] In this case, that betrayal had a double aspect since the respondent had a long-term friendship with one of the owners of the company. As her Honour observed:[5]
Whilst all acts of thefts are dishonest, I regard as a particularly serious aspect of your conduct that you were stealing from people you knew whilst working alongside them …
[4]Reasons [10].
[5]Reasons [11].
The respondent not only stole a substantial amount of money over a sustained period, but falsified accounts to disguise what she had done. Her motivation was to gain money to feed compulsive gambling, which put the offending into context but did not excuse it. The offences were committed for personal benefit, although there were emotional issues underlying the gambling problem that the respondent suffered from.
In short, the judge assessed the offending as ‘being well into the mid-range of seriousness’ for such a charge of theft.[6]
[6]Reasons [14].
In dealing with the mitigating factors, her Honour noted the plea of guilty (which had considerable utilitarian value), the cooperation with the investigation, the remorse displayed, and the personal factors outlined in a psychological report prepared by Carla Ferrari, and tendered on the plea.
Ms Ferrari, assessed the respondent a week or so before the plea hearing. She said that the respondent appeared to have suffered depression and anxiety, but did not make a formal diagnosis to that effect.[7] Her Honour found no basis to moderate the respondent’s sentence on the basis of lowered culpability, or any other connection between her emotional state and the offending itself.[8]
[7]Reasons [33].
[8]Reasons [38].
Ms Ferrari also said that the respondent’s inability to manage her emotions made her prone to thoughtless and careless acts. The judge did not, however, regard the pattern of offending to be consistent with any notions of thoughtlessness or carelessness.[9] This was knowing and intentional conduct.
[9]Reasons [36]
Ms Ferrari assessed the respondent as presenting a low-risk of reoffending. The judge accepted that assessment, noting however, that the respondent’s risk of relapse would increase if she did not engage in appropriate treatment.[10]
[10]Reasons [37].
A pre-sentence Community Correction Order (‘CCO’) assessment found that the respondent presented a medium-risk of re-offending. The judge commented that this assessment would depend on the particular criteria used by the Community Corrections authorities when arriving at their conclusion.[11]
[11]Reasons [50].
The judge continued by saying that the respondent’s lack of criminal history was to her credit. Her previous good character was found to be relevant to her prospects of rehabilitation.[12]
[12]Reasons [31].
Finally, her Honour accepted that the respondent’s symptoms of depression and anxiety would make her experience in prison more burdensome, and took these matters into account.[13] She noted that specific deterrence was not a factor that should feature heavily in the exercise of the sentencing discretion.[14]
[13]Reasons [39].
[14]Reasons [42].
The judge’s conclusion
Her Honour acknowledged the prosecution’s submission that a ‘combination’ sentence comprising a term of imprisonment of less than 12 months, and a CCO would be insufficient. However, she rejected that submission.
In considering similar cases where the amount stolen had been roughly of the same order as that featuring in this case, and where no restitution had been made, the judge could find no case where a wholly community-based sentence had been imposed.[15] Additionally, she noted that a period of actual imprisonment was required in order to meet all relevant sentencing principles.[16] Furthermore, she recognised that by reason of the respondent’s personal circumstances, substantial restitution, which would have been a powerful mitigating factor had it been made, was simply not possible.[17]
[15]Reasons [54].
[16]Reasons [47].
[17]Reasons [55].
As such, her Honour came to the conclusion that a term of imprisonment of 9 months, followed by a CCO under extended supervision, would be sufficient to fulfil all of the purposes of sentencing.[18] The respondent was then sentenced in the manner outlined earlier in these reasons.
[18]Reasons [57].
The Director’s submissions
The Director submitted that the present sentence sat far below the range of sentences that had been properly open to her Honour. It was submitted that the sentence failed to acknowledge the importance of both general deterrence and denunciation in sentencing for matters of this kind. As such, it was submitted that an increase in sentence was required to maintain ‘adequate standards of punishment’, and to ‘ensure uniformity in sentencing’.
In the Director’s written case, it was submitted that the respondent’s conduct could be characterised as a ‘stock standard’ but ‘serious’ case of white collar offending. The amount taken, the enormous breach of trust, the prolonged period of offending, the attempt to conceal what had been done, and the effects of the various acts of theft upon the company were all submitted to be aggravating features.
While the Director acknowledged that the respondent’s plea of guilty, remorse, cooperation with investigators and lack of prior convictions were all matters in mitigation, she submitted that there were no ‘powerful’ factors, such as Verdins,[19] that would justify the sentence imposed by the judge below.
[19]R v Verdins (2007) 16 VR 269.
The Director’s written case relied on the principles governing sentencing for white collar offences laid down by this Court in DPP v Bulfin.[20]
[20][1998] 4 VR 114 (‘Bulfin’).
The Director submitted that a combination sentence of a term of imprisonment and a CCO, though potentially available in an appropriate case, was not reasonably available in the circumstances of this case. Such a sentence, if permitted to stand, would undermine the signal importance of general deterrence in cases of this kind.
The Director also relied on Dyason v The Queen,[21] where this Court held that the approach taken in Bulfin was still applicable even after the introduction of CCOs to the sentencing regime, and the decision of this Court in the guideline judgment of Boulton v The Queen.[22]
[21](2015) 251 A Crim R 366 (‘Dyason’).
[22](2014) 46 VR 308.
The respondent’s submissions
Senior counsel for the respondent frankly acknowledged that this sentence was lenient, and might also be regarded as merciful. It did not follow that the sentence was manifestly inadequate, or that appellate intervention was warranted.
It was submitted that the judge below had been entitled to accord significant weight to the emotional difficulties that the respondent had been facing as a result of the death of her former partner, and the terminal illness and death of her father. In addition, the respondent carried the burden of looking after her elderly mother, being her primary carer, and would undoubtedly find imprisonment significantly more difficult than would a prisoner not confronting that situation.
Finally, it was submitted in the alternative, that should this Court conclude that the sentence imposed was manifestly inadequate, the appeal should be dismissed in the exercise of the residual discretion. Two bases were put forward in support of that submission. First, the Director’s written case had focused upon Bulfin and Dyason, almost in the vein of arguing specific error. Yet neither of these cases had been mentioned by the prosecution during the course of the plea. Secondly, the respondent had served two thirds of her sentence of imprisonment when this appeal was finally brought on for hearing. That was said to constitute delay, conducive to distress, which should be taken into account in deciding whether to increase this sentence.
Analysis
Having given this matter careful consideration, we are constrained to the view that this sentence was not merely lenient, or merciful, but manifestly inadequate.
The judge was required to synthesise a number of aggravating and mitigating factors. Her Honour identified each of these factors correctly, and assessed the gravity of this offending appropriately. What she did not do was impose a sentence anything like commensurate with that gravity.
A sentence of 9 months’ imprisonment, coupled with a CCO of modest length and moderate punitive character, fell far short of giving effect to the principles laid down for sentencing white collar offenders who have engaged in theft of substantial amounts, and particularly in circumstances of egregious breach of trust. In this case, the breach also involved the betrayal by the respondent of the personal friendship and trust reposed in her by the owner of the business. In addition, it occurred in circumstances which placed the business of her employer under significant financial strain, a factor which ought to have been readily apparent to the respondent.
There is no basis for the exercise of the residual discretion. The fact that two cases were relied upon in the Director’s written case before this Court that were not mentioned on the plea, (but are of course well known to most of those who practise in this area) provides a slender basis at best to exercise the discretion.
Had the respondent served her sentence and been released, there would have been a far stronger argument in favour of dismissing this appeal, notwithstanding manifest inadequacy. That is not to say that we have not taken that factor into account in re-sentencing the respondent.
Finally and for the sake of completeness, we should note that senior counsel for the respondent tendered, on the appeal, a handwritten note sent by one of the owners of the company to the respondent, in prison. That note, we were told, was sent in April of this year. It indicates that the author had essentially forgiven the respondent for what she had done, and wished her well.
We have taken that note into account in re-sentencing the respondent. The sentence which we consider appropriate is the minimum sentence that could reasonably be imposed for offending of this gravity.
Conclusion
The appeal should be allowed. The sentences of 9 months’ imprisonment combined with a 2 year CCO with conditions should be set aside. In lieu thereof, the respondent should be sentenced to a term of 2 years and 6 months’ imprisonment. A non-parole period of 18 months should be fixed.
We state, pursuant to s 6AAA of the Sentencing Act 1991, that had the respondent not pleaded guilty, we would have imposed a sentence of 3 years and 6 months’ imprisonment with a non-parole period of 2 years and 3 months.
We declare a period of 177 days as pre-sentence detention and order that this be entered into the records of the Court.
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