DPP v Penny
[2012] VSCA 203
•5 September 2012
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No S APCR 2012 0048
| DIRECTOR OF PUBLIC PROSECUTIONS | Appellant |
| v | |
| BRUCE RICHARD PENNY | Respondent |
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| JUDGES | WEINBERG, HARPER JJA and T FORREST AJA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 21 August 2012 |
| DATE OF JUDGMENT | 5 September 2012 |
| MEDIUM NEUTRAL CITATION | [2012] VSCA 203 |
| JUDGMENT APPEALED FROM | R v Penny [2012] VSC 25 (King J) |
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CRIMINAL LAW — Sentencing — Theft and deception — Crown appeal — Respondent pleaded guilty to eight charges of theft, two charges of false accounting and nine charges of obtaining financial advantage by deception — Respondent an accountant and company secretary of company which conducted financing business —Company defrauded of just over $3 million — Respondent forwarded stolen sums to friend and close associate — Moneys lost in high risk ventures — Respondent’s offences committed over lengthy period — Substantial breach of trust — Respondent concealed offending by stating that sums stolen were in fact loans made in course of financing business — Total effective sentence of six years’ imprisonment with non-parole period of four years — Whether sentence manifestly inadequate — Plea conducted on erroneous basis that sum defrauded exceeded $7 million — Powerful evidence of good character — Unusual case in that respondent gained no personal financial benefit from offending — Current sentencing practices of limited utility — Sentence imposed merciful but within range — Appeal dismissed.
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| Appearances: | Counsel | Solicitors |
| For the Appellant | Mr J R Champion SC with Mr B F Kissane | Mr C Hyland, Solicitor for Public Prosecutions |
| For the Respondent | Mr B G Walmsley SC with Mr C T Carr | Martin Irwin & Richards |
WEINBERG JA:
The respondent, Bruce Penny, pleaded guilty in the Supreme Court at Mildura to eight charges of theft, two charges of false accounting, and nine charges of obtaining financial advantage by deception.
On 7 February 2012, the respondent was sentenced as follows:
Charge on Indictment Offence Maximum Sentence Cumulation 1 Theft
[Crimes Act 1958 (Vic) s 74]10 years
3 years 18 months 2 False Accounting [Crimes Act 1958 (Vic) s 83] 10 years
12 months Nil 3 Theft
[Crimes Act 1958 (Vic) s 74]20 years[1] 3 years Nil 4 Theft
[Crimes Act 1958 (Vic) s 74]20 years
2 years 6 months Nil 5 Theft
[Crimes Act 1958 (Vic) s 74]20 years
2 years 6 months Nil 6 Theft
[Crimes Act 1958 (Vic) s 74]20 years
2 years 6 months Nil 7 Obtaining Financial Advantage by Deception
[Crimes Act 1958 (Vic) s 82]20 years
2 years Nil 8 Obtaining Financial Advantage by Deception
[Crimes Act 1958 (Vic) s 82]20 years
2 years Nil [1] For charges 3-14 and 17-19, the respondent was sentenced as a continuing criminal enterprise offender under Part 2B of the Sentencing Act 1991 (Vic), and as such the maximum penalty for each of these offences is 20 years.
Charge on Indictment Offence Maximum Sentence Cumulation 9 Obtaining Financial Advantage by Deception
[Crimes Act 1958 (Vic) s 82]20 years
2 years Nil 10 Obtaining Financial Advantage by Deception
[Crimes Act 1958 (Vic) s 82]20 years
2 years Nil 11 Obtaining Financial Advantage by Deception
[Crimes Act 1958 (Vic) s 82]20 years
2 years 9 months Nil 12 Obtaining Financial Advantage by Deception
[Crimes Act 1958 (Vic) s 82]20 years 3 years 6 months Base 13 Obtaining Financial Advantage by Deception
[Crimes Act 1958 (Vic) s 82]20 years
2 years 9 months Nil 14 Obtaining Financial Advantage by Deception
[Crimes Act 1958 (Vic) s 82]20 years 3 years 6 months 6 months 15 False Accounting
[Crimes Act 1958 (Vic) s 83]10 years 9 months Nil 16 Obtaining Financial Advantage by Deception
[Crimes Act 1958 (Vic) s 82]10 years 2 years Nil 17 Theft
[Crimes Act 1958 (Vic) s 74]20 years 2 years Nil 18 Theft
[Crimes Act 1958 (Vic) s 74]20 years
2 years Nil 19 Theft
[Crimes Act 1958 (Vic) s 74]20 years 2 years 6 months 6 months
Total Effective Sentence: 6 years’ imprisonment Non-Parole Period: 4 years Pre-sentence Detention Declared: Nil
The Director of Public Prosecutions (‘the Director’) now appeals against the individual sentences, the orders for cumulation, the total effective sentence and the non-parole period on the ground of manifest inadequacy.
Section 289 of the Criminal Procedure Act 2009 relevantly provides that this Court must allow a Crown appeal against sentence if the Director establishes that ‘there is an error in the sentence first imposed’ and that ‘a different sentence should be imposed’.[2] Otherwise, the Court must dismiss the appeal. The Court retains a residual discretion to refuse to intervene even if sentencing error is demonstrated.[3]
[2]Criminal Procedure Act 2009 s 289.
[3]DPP v Karazisis (2010) 206 A Crim R 14, 34-5 (Ashley, Redlich and Weinberg JJA).
Circumstances of the offending
The respondent was, until his retirement in 2007, a member of a Mildura firm of accountants then known as Thomsons. For some time, he had been a partner of that firm.
The firm’s dealings included the administration and management of Tatjana Securities (Aust) Pty Ltd (‘Tatjana Securities’), a company that had been set up by Mr Eric Biggs, a successful Mildura horticulturist.[4] Its directors and shareholders included Eric Biggs, his son John Biggs and, at a later stage, his daughter, Beverley Biggs.
[4]Mr Biggs had first registered a company known as Tatjana Securities Pty Ltd, but by the time of the commission of these offences, a new company in the name of Tatjana Securities (Aust) Pty Ltd had been registered and had taken over the business of the first entity.
Tatjana Securities carried on a financing business. Its lending criteria were that it would provide loans to low risk clients of Thomsons. It was intended that such loans would be for the purpose of enabling clients (usually residents of Mildura or its surrounds) to purchase business equipment. The loans were generally small and unsecured.
The respondent was the company secretary of Tatjana Securities, and was responsible for the administration of its Mildura branch. He continued to be so responsible even after his retirement from the accounting firm. He was a trusted friend of the Biggs family.
In about 1995,[5] the respondent began to advance large amounts of money belonging to Tatjana Securities to his friend, John Edward Allen. Mr Allen had been a school friend of the respondent’s and had been best man at his wedding. There was some suggestion that Mr Allen was involved in the mining industry. He was not a resident of Mildura, and neither he nor any of his associated entities were clients of the respondent’s firm. He was most certainly neither a small nor a low risk borrower.
[5]The charges on the indictment only allege offences from 1997. The sentencing judge was careful not to punish the respondent for any offending not on the indictment: Sentencing Remarks, [39].
The respondent had no authorisation to make any such transfers. There were eight transfers, seven of which clearly went to Mr Allen, and one of which was assumed to have done so. Each of these provided the basis for a count of theft. The following table sets out the amounts and circumstances of each theft:
Date
Amount
Circumstances
28/11/1997
(charge 1)
$518,231.04 A cheque for that amount was issued and recorded merely as ‘loan no. 421’ for an unknown borrower. Neither the police nor the firm of accountants have been able to trace the recipient of these funds.
28/6/2001
(charge 3)
$950,600 This sum was paid by cheque and recorded as being a loan to Allen Investments (Qld) Pty Ltd. The directors of that company were Mr Allen and his wife. The cheque was cashed and the proceeds were transferred to an unknown person.
Date
Amount
Circumstances
3/9/2001
(charge 4)
$393,584.22 Cheque issued, recorded as being given to Biscawood Pty Ltd. The directors of that company, prior to its deregistration, were Ted Allen and his wife, Christina.
6/9/2001
(charge 5)
$399,832.39 Cheque issued to Biscawood Pty Ltd 31/1/2002
(charge 6)
$495,766.66 Cheque cashed at Mildura Westpac branch and funds forwarded to an unknown person. Recorded as a loan to Dynamic Commodities Pty Ltd. The directors of that company prior to its deregistration were Ted Allen and his wife
11/12/2008
(charge 17)
$50,000 Cheque issued to ‘J E and C Allen’
30/12/2008
(charge 18)
$73,419.11 Cheque issued to J E Allen and deposited into a United States account held in that name
30/1/2009
(charge 19)
$137,673.54 Cheque issued to J E Allen and deposited into United States account held in that name
Total: $3,019,106.96[6] [6]To this figure may be added the $45,000 which the respondent dishonestly obtained by falsely representing that John Allen and Christine Allen were entitled to such a payment by Tatjana Securities Pty Ltd. That conduct was charged on the basis of obtaining financial advantage by deception. The total amount is therefore $3,064,106.96.
The other charges on the indictment largely related to the respondent’s attempts to conceal the thefts set out above.
For example, the respondent pleaded guilty to two charges of false accounting. The first of these related to his having, for more than 11 years, placed false entries relating to three leases into the books of account. The respondent recorded the amounts due under the leases as being owed by entities not connected in any way with those agreements. Two of the leases were, in fact, clearly related to companies controlled by Mr Allen. The second charge related to the entry of a false record stating that a debt of $82,069.78 had been transferred to the account of Budd Drilling Pty Ltd, an entity which was in fact not responsible for that debt.
In 2005, Eric Biggs died and his estate passed to John and Beverley Biggs. They decided to change the software used to record the accounts of Tatjana Securities so that they could more easily monitor the company’s accounts. They required the respondent to provide all of the accounts and the details relating to them.
The respondent was slow to perform this task. In response to the Biggs’ enquiries, he sought to give his advances to Mr Allen an appearance of propriety by creating false loan documents (which were usually unsigned by the purported borrower and were false in every particular save for the amounts of money involved). He eventually provided 12 such documents.
The respondent also falsified the company’s accounts. His method was to alter the company’s records to reflect that other persons or entities had in fact borrowed the funds which had been advanced to Mr Allen. In this way, each theft was recorded as a seemingly legitimate loan from Tatjana Securities (although not one in keeping with that company’s lending criteria). That conduct gave rise to eight charges of obtaining a financial advantage by deception. The relevant financial advantage was the evasion of a debt to Tatjana Securities.
The other persons or entities recorded as borrowers included companies associated with the respondent. By way of example, one of the purported borrowers was Sunset Vineyards Management Pty Ltd. That entity was incorporated to manage a vineyard pursuant to a joint venture arrangement. One of the joint venturers was the respondent’s family company.
No repayments were made on any of the purported loans. As of 31 December 2008, the amount owing to Tatjana Securities, apparently by Sunset Vineyards Management Pty Ltd, was $1,459,919.89. Interest on the purported loans was recorded for accounting and taxation purposes, thereby resulting in Tatjana Securities incurring tax liabilities.
The respondent also pleaded to a further charge of obtaining financial advantage by deception between 15 August 2008 and 12 February 2009. The conduct giving rise to that charge was falsely representing that John Allen and his wife were entitled to $45,000 from Tatjana Securities. That amount was paid by electronic transfer.
By February 2009, John and Beverley Biggs had become aware of the fact that the respondent was continuing to draw funds from the Tatjana Securities account. They then terminated his access to the account. The evidence on the plea was that the respondent continued to send money to Mr Allen from other sources. Between March and May 2009, he made a series of transfers totalling over $250,000. Two such payments were made from the account of Mendotta Pty Ltd, a company of which the respondent and his wife were directors. Another payment was made from the account of Baron Langtree Pty Ltd. While the respondent was a director and shareholder of that company, he did not have the authorisation of the other directors to make that transfer.
The respondent’s criminality was uncovered in the following way. In late 2008, a firm of solicitors was engaged to oversee the termination of Tatjana Securities’ financing business, and the assessment and recovery of debts owing to it. The solicitor involved became concerned about the number and value of loans related to Mr Allen.
On 25 February 2009, the respondent emailed the accountants assisting in the termination of the business. He identified the debt owing to Tatjana Securities from Mr Allen or entities associated with him as being $3,718,926. He included a copy of an email he received from Mr Allen which stated that he was in the United States securing finance in order to finalise his outstanding accounts with Tatjana Securities.
On 3 March 2009, the respondent disclosed that the loan documentation he had earlier provided was false, and that the false loans in fact related to Mr Allen. The following day, a reconciliation of the loans resulted in discovery of the thefts and the fraud.
The respondent made a no comment record of interview when first spoken to by police. He subsequently re-attended the police station and told the police that Mr Allen was a close friend of his, and that Mr Eric Biggs had approved of the substantial loans being made without security. He added that he had not received any personal benefit, and would not say why he had given Mr Allen millions of dollars of money belonging to Tatjana Securities. The sentencing judge commented that no satisfactory explanation had ever been given as to why the respondent behaved in this way.
Director’s Submissions
In brief form, the Director submitted that the sentence was manifestly inadequate having regard to the nature of the offending and its duration. He pointed to three ‘possible sources’ that were said to ‘explain [the] error’:
(a) insufficient weight was given to the respondent’s categorisation as a ‘continuing criminal enterprise offender’;
(b) too much weight was given to the respondent’s good character; and
(c) a failure to order appropriate cumulation.
As to the first of these points, it was said that the sentencing judge did not sufficiently take into account the higher maximum penalty of 20 years’ imprisonment on charges 3-6, 7-14 and 17-19 in respect of which the respondent was to be sentenced as a continuing criminal enterprise offender. The Director submitted that, for this purpose, it was appropriate to compare the sentences imposed on charges 1 and 3. A sentence of 3 years’ imprisonment was imposed on charge 1 (which was subject to a maximum of 10 years) and the same sentence was imposed on charge 3 despite the maximum sentence on that charge being 20 years’ imprisonment.
In relation to good character, the Director noted that the sentencing judge had given the respondent great benefit for his ‘previous exemplary life as a citizen of [the] community’.[7] The sentencing judge had also noted that the character reports received on the plea were ‘some of the most impressive’ she had seen. Nevertheless, the Director submitted that good character ought to have attracted less weight. That was because other sentencing considerations, such as the need for general deterrence, were of greater significance. He emphasised that the respondent persisted in the offending for a lengthy period of time, and that the respondent exploited his status as a trusted member of the community in order to commit the offences.
[7]Sentencing Remarks, [61].
In relation to cumulation, the Director noted that orders for cumulation were made on only three of the charges (in addition to the base sentence). He pointed in particular to charge 3, which related to the theft of some $950,000, and noted that it was removed in time from the other thefts. Yet, there was no order for cumulation on that charge. He contended that substantial cumulation was in fact warranted to reflect the overall criminality in question.
The Director also submitted that the sentence imposed did not reflect current sentencing practices. He cited a number of cases[8] and put particular emphasis on the remarks of this Court in Koch v The Queen relating to the primacy of general deterrence in large-scale theft cases.[9]
[8]Including R v De Stefano [2003] VSC 68 and Yusuf v The Queen [2010] VSCA 266 which had been cited to the sentencing judge.
[9][2011] VSCA 435, [55] (Maxwell P). See also DPP v Bulfin [1998] 4 VR 114, 132 (Charles JA).
Respondent’s submissions
Counsel for the respondent submitted that the sentencing judge had properly addressed the nature of the offending and carefully weighed all the material and facts before her. She had noted specifically the aggravating features of this case, including the respondent’s breach of trust. However, she had also found that the offending was for the benefit of Mr Allen, and that the respondent had gained no pecuniary benefit from his actions. Counsel submitted that because the respondent had derived no personal benefit from his offending, the cases cited by the Director were not on point and were of little assistance.
Counsel emphasised that the respondent had pleaded guilty, and was properly entitled to have that treated as a significant mitigating factor. He was also entitled to a discount owing to the sentencing judge’s conclusion that he would find incarceration more burdensome than the average prisoner by reason of his depression and anxiety at the time of sentence.
In relation to the significance of evidence of the respondent’s good character, counsel submitted that ‘limited credit’ was available, rather than no credit at all. He submitted that the sentencing judge had, in fact, downplayed the effect of that evidence owing to the need to give appropriate effect to general deterrence.
Counsel next submitted that the sentencing judge was entirely aware of the need to sentence the respondent as a continuing criminal enterprise offender on the relevant charges, and that her Honour did in fact sentence him on that basis.
Finally, counsel submitted that the sentencing judge had not erred in making the orders that she did for cumulation. Rather, her Honour had correctly applied the principles set out in DPP v Grabovac[10] by imposing appropriate individual sentences and making proper orders as to cumulation.
[10][1998] 1 VR 644 (‘Grabovac’).
Consideration – erroneous assumption as to quantum of the theft on the plea
Two points can be made at this stage about the details of the thefts, as set out in table form above.[11] First, although the offending took place over a very lengthy period, the intervals between offending were not consistent. No charges alleged an offence between 2003 and 2007, but four offences were alleged in a six month period in 2001-2002. This was but one of the curious features of this case.
[11]Above n 10.
Secondly, the amount stolen was just over three million dollars. That is a very large sum, but significantly less than the figure put forward by the Crown, and accepted on behalf of the respondent, on the plea. The error as to the amount defrauded was only belatedly recognised by both parties to this appeal. The written cases that were filed both proceeded on the basis that the amount in question was more than $7 million.
The reduction in the scale of the fraud from just over $7 million dollars to just over $3 million dollars represents a significant shift from the way the case was conducted on the plea. The sentencing judge was told that the total amount involved in relation to the theft and deception charges was $7,027,510.95. As the Director frankly acknowledged, that figure involved a significant element of double counting. It included the amount of the thefts, as well as the balance of the false loan accounts.
The case presented on appeal was therefore somewhat artificial. The Director argued that the sentence was manifestly inadequate even though he accepted that, in actual fact, the offending was in some respects significantly less serious than had been contended on the plea.
It must be kept in mind that the amount in fact stolen is of very considerable relevance in determining the appropriateness of the sentence imposed.
In Koch v The Queen, Maxwell P (with whom Buchanan and Neave JJA agreed), said that while
the amounts involved are not determinative of sentence, they are – for good reason – of very great significance in determining the appropriate sentence. This is so, at least in part, because the quantum provides some real indication of the measure of loss and damage, both financial and psychological, caused to the victims of the frauds.[12]
[12][2011] VSCA 435, [58].
While in this case there was other evidence of the measure of damage inflicted, such as in the victim impact statements provided by John and Beverley Biggs, the quantum of the theft remained a highly relevant factor when assessing the gravity of the offence. The Director’s position on the appeal therefore represents a significant weakening of his case.
Reasons for the offending – gaps in the evidence
Another remarkable feature of this case was that there was no explanation whatever for the respondent’s conduct. Some possible theories were canvassed on the hearing of the appeal. They included the respondent being in Mr Allen’s thrall (despite his denial that that was the case), and the possibility that after the respondent had made the first advance to Mr Allen, he was compelled to commit further thefts in the hope that Mr Allen would then be able to repay the total amount owing. In the end, however, the evidence did not establish the reasons for the respondent’s conduct, and the sentencing judge was left with nothing upon which to base any conclusion.
The fact that there was no satisfactory explanation of the reasons for the advances to Mr Allen, or as to Mr Allen’s participation and knowledge of the source of the funds, made her Honour’s task in sentencing the respondent a particularly difficult one.
The fact that the respondent was well placed to offer such an explanation, and yet, in neither of his two records of interview, chose to do so, was relevant to the question of remorse. Her Honour tacitly, at least, approached the matter in that way. She qualified the weight to be given to remorse, observing specifically that the respondent had not offered to make any restitution. During the course of the appeal, it was noted that the respondent’s failure to give a detailed account of his dealings with Mr Allen may have weakened the viability of any civil claim that might be brought against Mr Allen for recovery of the funds.
Her Honour found, as was clearly the case, that there was no evidence that the respondent had received any financial benefit from his offending. Although that factor will not necessarily always be of great weight for sentencing purposes, it is nevertheless a matter which can properly be taken into account.[13]
[13]R v Ellery [2012] VSC 349, [27] (Hollingworth J).
Good character evidence
As previously noted, a major part of the Director’s case on appeal was that the sentencing judge had greatly overvalued the evidence of the respondent’s good character.
The character evidence led on the plea was undoubtedly powerful. Its force was noted by the sentencing judge in her reasons for sentence. Her Honour summarised the character evidence in the following way:
I note that in your case you have presented to this court testimonials from 16 individuals in this community, including your wife and daughter. They are glowing references and describe you as a devoted community member, who provided continual community service to this city of Mildura. You were held in the highest of esteem, and most of those who wrote continue to value your friendship and your input into projects. All of them talk about your honesty and your integrity, your strong sense of morality, of right and wrong, your sound financial judgment, your conservative and careful management of accounts of community organisations, your kindness to others, to friends, to colleagues, to total strangers. They are some of the most impressive character reports I have ever seen.[14]
[14]Sentencing Remarks [57].
Her Honour, after sentencing the respondent, said that she had ‘given [him] great benefit for [his] previous exemplary life as a citizen’ of the community.
The Director contended that the ‘great benefit’ given to the respondent on account of the character evidence overweighted that factor in light of the principles set out in R v Smith[15] and R v Liddell.[16] In the latter case, Ormiston JA said:
Undoubtedly, a convicted person can ask to be given proper credit for a generous, upright and virtuous life when first that person must be sentenced for an offence, however serious. It is the extent of that credit which is here in issue and more specifically the extent to which one may infer, if one can, that the learned judge failed to give sufficient credit. In the end I cannot reach the latter conclusion. Moreover, for all the fulsome praise lavished upon the applicant, some of it had an air of unreality which failed to take into account all the circumstances of his life. One would concede that the applicant was not the conventional con-man who builds up goodwill in order to take advantage thereof to beg, borrow or steal from his acquaintances…
[15](1982) 7 A Crim R 437, 442 (Starke J).
[16][2000] VSCA 37, [8].
It was submitted that the respondent exploited his good standing in the community to further his dishonest conduct. In those circumstances, it was said, the sentencing judge had to ‘substantially temper the mitigatory weight of good character’.
However, as the respondent submitted, it is clear from a fair reading of her Honour’s sentencing remarks that she did not discount the importance of general deterrence in light of the character evidence. Indeed, her Honour stated that the need for general deterrence was of ‘real significance’.[17] In those circumstances, it is not clear that excessive weight was given to the evidence of good character which was led on the plea. Her Honour did not fall into the error (identified by Charles JA in DPP v Bulfin (‘Bulfin’)) of allowing matters personal to the offender to ‘distract attention from the importance that general deterrence ought to carry’ in cases of white-collar crime.[18]
[17]Sentencing Remarks, [55].
[18][1994] 4 VR 114, 131.
The Director’s remaining contentions
The Director’s arguments relating to cumulation and the effect of the continuing criminal enterprise charges can be quickly disposed of. There was no allegation that these factors constituted specific error. In any event, in my view, they did not in the circumstances. Her Honour’s approach to the question of cumulation was consistent with that taken in Grabovac, and her Honour was plainly aware of the effect of the continuing criminal enterprise charges.
What must be shown on an appeal based on manifest inadequacy is that the ‘result embodied in [the sentencing judge’s] order … is unreasonable or plainly unjust’.[19] The arguments raised by the Director on these points are structural in nature. They go to the composition of the sentence imposed, and do not shed any light on the range of correct sentencing conclusions which would have been available assuming that appropriate weight been given to each sentencing consideration.
[19]House v The King (1936) 55 CLR 499. See also DPP v Karazisis (2010) 206 A Crim R 14, 43-4.
Finally, the Director acknowledged that were this Court to resentence the respondent it would be obliged to do so in a way which amounted to more than mere ‘tinkering’ with the sentence. He submitted that, owing to the aggravating features present in this case, a significantly higher sentence was warranted.
Counsel for the respondent met that contention by arguing that if this Court were to significantly increase the sentence (at least in a way which would not represent ‘tinkering’), then the sentence would be manifestly excessive. In support of that submission, counsel referred to the mitigating factors in this case and asserted that this case did not involve rampant or selfish greed on the part of the respondent.
Conclusions
The sentence imposed upon the respondent was, on any view, a merciful one, as her Honour herself recognised. That alone, of course, does not warrant this Court’s intervention.
Were this Court to interfere with the sentence imposed, and increase it by a meaningful degree, the respondent would have been dealt with harshly by comparison with other offenders whose moral culpability may have been significantly greater than his own.
In R v Quinn,[20] for example, the appellant was sentenced on a single count of conspiracy to defraud to a term of four years’ imprisonment with a non-parole period of two years and six months. The case bore some resemblance to the facts of the present appeal. The corporate victim was defrauded of approximately $4.5 million over a period of six years. Unlike the present case, however, Quinn used those funds for his own personal benefit. An appeal against sentence on the basis of manifest excess was withdrawn. Nevertheless, Brooking JA (with whom Batt JA agreed), said:
The conspiracy was performed over a long period of time - six years - and a very large amount of money - about $4.5m - was paid out by the company against the false invoices. The fraud was carefully concealed. It was unearthed only by chance, and might well never have been discovered. Large sums of money were spent prodigally - the waste was very great - in order that the applicant might enjoy an ostentatious style of life. Everything that was done was done for his personal gain. There was no element of need on his part: on the contrary, he was most lavishly rewarded by the company for his services. The applicant's conduct had a tendency to corrupt others. When money was repaid, this was done in an attempt to cover up the fraud. The offence was a most serious breach of trust by the Chairman and Chief Executive Officer of one of the largest public companies. General deterrence was a matter of great importance. Notwithstanding the judge's careful reasons for sentence, I do not think that his Honour can have given adequate weight to these considerations.[21]
[20](Unreported, Supreme Court of Victoria Court of Appeal, Brooking, Batt and Vincent JJA, 10 October 1997) (‘Quinn’).
[21]Ibid 35.
Vincent AJA (as his Honour then was) dissociated himself from those remarks. He emphasised that Mr Quinn had been ‘very publicly subjected to loss of position, reputation, and, with other members of his family, to substantial ridicule and humiliation, all of which must be regarded as possessing deterrent effect for others’.[22]
[22]Ibid.
I note that the factors mentioned by Vincent AJA are present in this case and were adverted to by the sentencing judge in her reasons.[23] Even had Mr Quinn been resentenced to a longer term of imprisonment, his sentence would, in all likelihood, have been of a similar length to that imposed upon the appellant in the present case. That would be so notwithstanding that the appellant, in this case, fell to be sentenced upon the basis that he did not personally benefit from his fraud.
[23]Sentencing Remarks, [56].
In Bulfin, the respondent was originally sentenced to five years’ imprisonment with a non-parole period of two years. On a Director’s appeal, that sentence was increased to one of six years’ imprisonment with a non-parole period of three years. The respondent’s frauds were described as being ‘on a colossal scale’.[24] He had acted as a mortgage broker and received payments by way of commission on fees derived from loans. He made false representations to lenders which had the effect of inducing them to believe that potential borrowers were capable of servicing the loans when, in truth, that was not so. In one transaction alone, the lender advanced $54 million and provided a guarantee in favour of the borrower in the amount of $96 million. There, the respondent had made false representations as to the value of the borrower’s assets. From that fraud, taken on its own, the respondent and a co-offender received approximately $2 million. The funds were directed towards a private venture that the respondent and his co-offender were pursuing.
[24][1998] 4 VR 114, 141 (Charles JA).
There are certain common features associated with the commission of white-collar crime that were present in Bulfin, and are also present in this case. As Charles JA observed:
Offences of the kind here in question almost invariably involve a carefully calculated course of conduct over a long period, repeated deliberate acts of dishonesty [and] substantial amounts of money… The offender often holds a position making it possible, or has the ability, to disguise or camouflage the conduct in question.[25]
[25]Ibid 132.
The sentence of six years’ imprisonment with a non-parole period of three years imposed by this Court in Bulfin was influenced to some degree by considerations of double jeopardy. Nonetheless, as with Quinn, it is important to appreciate that, unlike the present case, the offender in Bulfin made a significant personal gain from his offending. Indeed, that was the prime motivation. If, in this case, the respondent’s sentence were to be significantly increased, he would have been dealt with much more harshly than Bulfin despite the fact that his offending might be thought to be far less morally culpable.
The cases referred to by the Crown in order to demonstrate current sentencing
practices are of only very limited utility.[26] None of those cases involved a situation in which the offender derived no personal financial benefit from his or her criminality. Some of them also involve thefts of significantly greater amounts.[27]
[26]Reference should also be made to the sentence of four years’ imprisonment with a non-parole period of 2 years imposed in R v Tansey [2012] VSC 221. The amount stolen in that case by the offender, a solicitor, was $2 million. The funds stolen were variously used for the offender’s own purposes and to restore moneys previously stolen from other trust accounts.
[27]See, eg, R v De Stefano [2003] VSC 68 ($8.6 million obtained, sentenced to 10 years’ imprisonment with non-parole period of 7 years); Yusuf v The Queen [2010] VSCA 266 ($7.2 million obtained, sentenced to 12 years’ imprisonment with non-parole period of 9 years); DPP v Amanatidis (Unreported, County Court of Victoria, Judge Howard, 7 October 2011) ($7.1 million obtained, sentenced to 8 years’ imprisonment with non-parole period of 5 years).
Manifest inadequacy, like manifest excess, is difficult to make out. As Ashley, Redlich and Weinberg JJA noted in DPP v Karazisis, ‘error of this kind will not be established unless the appellate court is persuaded that the sentence was “wholly outside the range of sentencing options available” to the sentencing judge’.[28]
[28](2010) 206 A Crim R 14, 44.
As the Director pointed out, the offending in this case involved the theft of a significant amount of money and continued efforts by the respondent, over many years, to conceal his criminality. In part, his efforts were successful because of his good standing within the community. The sentencing judge properly noted that the respondent had committed an egregious breach of the trust reposed in him by the Biggs family. The harm done to the victims in this case was substantial, and ongoing. It had to be taken into account, and given full weight.
The sentencing judge also properly took into account certain mitigating factors which had to be balanced in the process of instinctive synthesis. She was satisfied that the respondent would find incarceration more difficult due to his current depression and anxiety, and noted his good prospects of rehabilitation. As previously mentioned, she also took into account evidence of his good character.
I should say that this case should not be taken as having any significant
precedential value. That is because the presentation of the case suffered from two most unsatisfactory features. First, the plea was conducted on the erroneous basis that the respondent had stolen over $7 million, when the true figure was approximately $3 million. For reasons that are not immediately apparent, counsel appearing on the plea did not pick up the error, and it was not until the hearing of the appeal that counsel recognised the correct scale of the theft.
Secondly, the dearth of evidence relating to Mr Allen’s knowledge (if any) of the source of the funds advanced to him, and the precise nature of his relationship with the respondent, rendered the sentencing judge’s task particularly difficult. It is true that the respondent was well placed to shed light on this matter, but it is nonetheless important for the relevant authorities to pursue a thorough investigation in cases of this kind so that all relevant sentencing considerations can be brought to light.
As I have indicated, this is a very unusual case. Some of the circumstances may almost be described as bizarre. Notwithstanding the gravity of the offending, involving as it did a large-scale fraud committed over a lengthy period, it cannot, I think, be said that a sentence of six years’ imprisonment with a non-parole period of four years was ‘wholly outside the range’ available to her Honour. The appeal should therefore be dismissed.
HARPER JA:
I agree with the judgment of Weinberg JA.
T FORREST AJA:
I also agree with the judgment of Weinberg JA.
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