FORSYTHE v Police - [2010] SASC 214

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Criminal)
FORSYTHE v POLICE
[2010] SASC 214
Judgment of The Honourable Justice Kourakis
16 July 2010
CRIMINAL LAW - PARTICULAR OFFENCES - PROPERTY OFFENCES - MISAPPROPRIATION - FRAUDULENT CONVERSION BY PERSONS ENTRUSTED WITH PROPERTY - SENTENCE
Appeal against sentence – appellant pleaded guilty to 297 counts of engaging in dishonest conduct with an intention to facilitate the deception of another and to benefit himself – Magistrate imposed sentence of 7 years with non-parole period of 4 years – appellant argues Magistrate misinformed about factual circumstances and therefore sentenced on inaccurate factual foundation.
Held: Magistrate erroneously had regard to an irrelevant matter, namely a fallacious view of the way in which the offence was committed – that error significant enough to call for review of sentence – sentence was within proper sentencing range for this offending – appeal dismissed.
Criminal Law Consolidation Act 1935 s 5AA(1)(i), s 140(4), s 353(4)(b), referred to.
R v Powell (2001) 81 SASR 9, discussed.

FORSYTHE v POLICE
[2010] SASC 214
Magistrates Appeal

KOURAKIS J: The appellant pleaded guilty in the Magistrates Court to 297 counts of engaging in dishonest conduct with an intention to facilitate the deception of another and to benefit himself contrary to s 140(4) of the Criminal Law Consolidation Act 1935. The appellant’s frauds were committed against his employer, The Salvation Army. The appellant came to be employed by The Salvation Army after he had received counselling assistance from its officers whilst serving a sentence of imprisonment for an earlier fraud.
At the time of the offences the appellant was the business manager of a division of The Salvation Army known as The Towards Independence Network of Services (the division). The division provides accommodation and therapeutic services through a number of different premises. The Salvation Army is responsible for maintaining those properties. The repair, maintenance and supply of goods associated with those buildings, under the amount of $3,000, are paid from two accounts, the Bridge Program Administration Account and the Towards Independence Account. As the business manager, the appellant was one of two signatories who jointly operated those accounts. The other signatory was the appellant’s supervisor. A practice was adopted in the division whereby the appellant’s supervisor signed blank cheques so that the business manager could more efficiently attend to paying invoices of less than $3,000. The appellant committed the offences by inserting on the signed blank cheques a fictitious payee and an amount which his supervisor would not have authorised if he had known all of the circumstances.
The offences were committed between about November 2005 and May 2008. The cheques were paid into the account of the appellant’s mother-in-law. Several days after paying the amounts into his mother-in-law’s account, the appellant would use the internet to transfer the funds into his own account.
The maximum penalty for an offence under s 140(4) of the Criminal Law Consolidation Act 1935 is 15 years for an aggravated offence. The offences were aggravated because the appellant abused a position of authority, or a position of trust, in committing the offences.[1] The total amount defrauded by the appellant was more than $550,000. The Magistrate sentenced the appellant to a term of imprisonment of seven years and fixed a non-parole period of four years commencing on the date the appellant was first taken into custody.
[1] Criminal Law Consolidation Act 1935 s 5AA(1)(i).
The appellant appeals on the ground that the Magistrate was misinformed about the factual circumstances of the offending and, as a result, sentenced on an inaccurate factual foundation with respect to the following matters:
·the knowledge of senior employees of The Salvation Army about his prior offending;
·the way in which the fraud was effected and in particular the level of deception involved;
·the way in which the proceeds of the fraud were used.
The appellant was represented before the Magistrate but was unrepresented on appeal. I informed the appellant that he was entitled to seek an adjournment for the purpose of arranging legal representation. After considering the matter, the appellant advised me that he wished to proceed and have the matter finally resolved.
The appellant’s background
The appellant was born on 27 February 1955. He completed Year 12 at Sydney Church of England Grammar School. That was not a happy experience for him. He was badly bullied. The psychological difficulties from which he now suffers may have their origin in that period of his life.
The appellant then worked for some time in his father’s accounting firm. He left there to work in computer sales. He eventually found work in his uncle’s stock broking firm. He moved to other employment in the financial services industry before establishing his own firm as an investment advisor in about 1990-1991. The appellant eventually fell into financially difficult circumstances and in 1995 he commenced to misappropriate the funds of his clients. In June 1999 he was convicted of 33 fraud offences in New South Wales. The total amount misappropriated was $1.5 million. He was sentenced to a period of imprisonment of six years with a non-parole period of four years. It will be observed that the head sentence against which the appellant appeals is just one year longer than the head sentence imposed in New South Wales, and that the non-parole period is the same.
Whilst serving his New South Wales sentence, the appellant arranged for an interstate transfer and served the last part of his non-parole period within the South Australian correctional services system at Cadell. After serving two and a half years of his non-parole period, the appellant was released from Cadell on 15 December 2001 on home detention. He commenced working as a volunteer with The Salvation Army in about February 2002.
In August 2002 the appellant commenced paid employment as a part-time clerk with the Salvation Army. The appellant’s non-parole period came to an end in June 2003. The appellant later became the Accounts Manager – Clerical Administrator within the division. Eventually he was promoted to Business Manager on 1 July 2004. The appellant’s sentence was fully served by June 2005.
The appellant had hoped to take a position in The Salvation Army in adult education. He had spoken to senior officers of The Salvation Army about finding employment in its education and training programs. During his time with The Salvation Army he applied for one position as a trainer but was unsuccessful.
Alleged errors
The Magistrate was provided with a statement of agreed facts signed by the prosecutor and the appellant’s solicitor. The appellant asserts that he was not shown that statement before it was tendered. The Magistrate was also provided with a statement of the appellant’s personal circumstances which had been taken by his solicitor. The solicitor’s statement also set out the appellant’s personal circumstances and some further details about the way in which the offences were committed. The appellant also claims that he was not shown that statement before it was provided to the Magistrate. It is not necessary for me to finally determine whether that was so or not for reasons which appear below.
The statement of agreed facts included the following paragraphs:
[9]Costs for repair, maintenance or supply of goods under $3,000 are paid by cheque from two main accounts – ‘The Bridge Program Administration’ account held with Westpac (BSB No: 735016, Account Number 070430) and ‘Towards Independence’ account held with Westpac (BSB No 035010 Account Number 126037).
…
[19]It was accepted practice for blank cheques to be signed in advance to facilitate unexpected or urgent costs.
[20]FORSYTHE fabricated invoices and documents from various suppliers and contractors.
[21]Falsification was carried out by FORSYTHE by scanning letterheads and watermarks of companies and preparing invoices for products on these documents.
[22]FORSYTHE would then draw a cheque in favour of Ms S TODD (dec) and present the invoice as supporting documentation for the payment.
A statement made by the appellant, taken on 4 June 2009, included the following paragraph:
In respect to the offending itself I conducted fraudulent activities by firstly creating a bogus invoice, drawing a cheque from some of that invoice in favour of my mother-in-law who is now deceased. I would then bank it in to her account. That account was connected by Internet banking to my other accounts. In respect to the personal accounts which I then transferred the money into they were also my wife’s accounts but I was responsible for paying all the bills and she had no involvement in this whatsoever.
On the basis of the above information, the Magistrate found that offences were committed in the following way:
[9]You fabricated invoices and documents from various suppliers and contractors. Cheques were then drawn and signed initially, I think, by your supervisor and in the later period, possibly by yourself. The supervisor involved was deceived by your actions into believing that the payments were for legitimate contractors or vendors.
In fact the blank cheques were, as I earlier explained, pre-signed by the appellant’s supervisor and made available to the appellant to make payments required for the maintenance and repair of the buildings. The factual basis on which the Magistrate proceeded involves a greater degree of active deception by the appellant to procure his supervisor’s signature than was in fact the case. In so proceeding, the Magistrate was plainly incorrect. The appellant did eventually fabricate invoices, but they were fabricated after the event so that if there were ever an audit of the financial affairs of the Towards Independence Program it would appear as if the cheques had been written and delivered to genuine suppliers of services.
It follows that the Magistrate has made a process error in that he had regard to an irrelevant matter namely a fallacious view of the way in which the offence was committed.[2] In my view, the error is significant enough to call for a review of the appellant’s sentence. It is therefore unnecessary to consider the appellant’s other grounds.
[2] R v Horstmann [2010] SASC 103 at [36] and [38].
Review of sentence
Notwithstanding the factual significance of the error, in my view, the way in which the offence was in fact committed was no less serious than the erroneous view of the circumstances taken by the Magistrate. Although the level of the appellant’s active deception was not as great, the offending involved a much deeper breach of trust.
In any event, the sentence imposed by the Magistrate was well within the proper sentencing range for this offending. If anything, the sentence, and in particular the non-parole period, fails to reflect the greater need for specific deterrence of the appellant having regard to his prior offending and the relatively short time after his release on home detention and the completion of his parole that he re-offended.
In R v Powell,[3] the Court of Criminal Appeal increased a sentence of five years and six months imposed for fraud committed by an employee to seven years. The total amount defrauded over a period of two years was $672,156.19. Powell was a first-time offender who had pleaded guilty. The sentence imposed by the Court of Criminal Appeal in Powell is perhaps at the higher end of the range of reported sentences for frauds of this magnitude committed by a first-time offender even where there has been a guilty plea.[4] It was, however, less than half of the maximum sentence of 15 years.
[3] (2001) 81 SASR 9.
[4] Cf R v Cavanagh [1999] SASC 418; R v Suri [2004] SASC 80; R v Musolino [2004] SASC 89; Police v Curtis (2004) 145 A Crim R 587.
The imposition of a sentence on the appellant at the higher end of the reported range is appropriate in this case for the following reasons. The total amount defrauded was relatively large. The money was diverted from a fund which helped people in great need to support the comfortable lifestyle of the appellant and his family. The fraud was motivated by both greed and the appellant’s desire to exhibit the trappings of success. The offending was calculated.
Most significantly, the appellant’s prior offending required a relatively higher sentence for the purposes of specific deterrence. The appellant is not to be twice punished for the New South Wales offending but the commission of these offences so soon after the completion of his non-parole period demands a sentence which is calculated to deter any future recidivism and leaves relatively less room for a sentence weighted towards rehabilitation.
During the course of the appeal I was impressed by the intelligence of the appellant and what, appears at least, to be a growing insight into the reasons for, and consequences of, his offending. However, that impression raises only a faint hope that he will behave differently when he is released; it is not a sound enough basis on which to depart substantially from the penalty levels which are objectively necessary to satisfy the demands of punishment and deterrence.
Conclusion
I dismiss the appeal.