Harmer v The Queen
[2005] WASCA 101
•2 JUNE 2005
HARMER -v- THE QUEEN [2005] WASCA 101
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2005] WASCA 101 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CCA:169/2004 | 11 MARCH 2005 | |
| Coram: | STEYTLER P ROBERTS-SMITH JA MCLURE JA | 2/06/05 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Leave to appeal granted Appeal allowed | ||
| B | |||
| PDF Version |
| Parties: | WILLIAM FRANCIS HARMER THE QUEEN |
Catchwords: | Criminal law and procedure Leave to appeal against sentence Breach of s 999 of Corporation Act 2001 Turns on own facts |
Legislation: | Corporations Act 2001 (Cth), s 999 Managed Investments Act 1998 (Cth) |
Case References: | Dinsdale v The Queen (2000) 202 CLR 321 Lowndes v The Queen (1999) 195 CLR 665 R v Chan (1989) 38 A Crim R 337 Clark v The Queen; Forge v The Queen (2004) 50 ACSR 592 R v Greenburg (1993) 68 A Crim R 392 R v Barrick (1985) 81 Cr App Rep 78 R v Wilkinson (1996) 85 A Crim R 353 R v Thomson [2003] VSCA 164 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : HARMER -v- THE QUEEN [2005] WASCA 101 CORAM : STEYTLER P
- ROBERTS-SMITH JA
MCLURE JA
- Applicant
AND
THE QUEEN
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram : EATON DCJ
File No : IND 1445 of 2003
Catchwords:
Criminal law and procedure - Leave to appeal against sentence - Breach of s 999 of Corporation Act 2001 - Turns on own facts
(Page 2)
Legislation:
Corporations Act 2001 (Cth), s 999
Managed Investments Act 1998 (Cth)
Result:
Leave to appeal granted
Appeal allowed
Category: B
Representation:
Counsel:
Applicant : Mr R G W Bayly
Respondent : Ms E C J Needham
Solicitors:
Applicant : Bayly & O'Brien
Respondent : Commonwealth Director of Public Prosecutions
Case(s) referred to in judgment(s):
Dinsdale v The Queen (2000) 202 CLR 321
Lowndes v The Queen (1999) 195 CLR 665
R v Chan (1989) 38 A Crim R 337
Case(s) also cited:
Clark v The Queen; Forge v The Queen (2004) 50 ACSR 592
R v Greenburg (1993) 68 A Crim R 392
R v Barrick (1985) 81 Cr App Rep 78
R v Wilkinson (1996) 85 A Crim R 353
R v Thomson [2003] VSCA 164
(Page 3)
1 STEYTLER P: I have read the judgment of McLure JA. The reasons given by her for allowing the appeal, with which I agree, express my own reasons for joining in the decision of the Court to give leave to appeal, allow the appeal, quash the sentence imposed by the sentencing Judge and substitute for it a term of 12 months' imprisonment with a direction for release after serving 5 months thereof upon giving security by recognisance of $500 to be of good behaviour for a period of 12 months.
2 ROBERTS-SMITH JA: I have read the reasons for decision given by McLure JA. They adequately express my own reasons for the decision made by the Court on the conclusion of the hearing and I have nothing further to add.
3 MCLURE JA: The applicant was convicted after trial of 10 counts of making a statement in a prospectus that was materially misleading and likely to induce others to subscribe for securities when he knew or ought reasonably to have known that the information was materially misleading contrary to s 999 of the Corporations Act 2001 (Cth) ("the Act"). Two materially misleading statements were repeated in relation to each of five named complainants.
4 On 8 October 2004 the applicant was sentenced to 2 years' imprisonment. The learned sentencing Judge directed that he be released after serving 12 months upon giving security by recognisance of $500 to be of good behaviour.
5 The applicant applied for leave to appeal against the sentence. At the conclusion of the hearing, the Court ordered that the applicant have leave to appeal, the appeal be allowed, the sentence imposed by the sentencing Judge be quashed and there be substituted for that sentence a term of 12 months' imprisonment with a direction for release after serving 5 months thereof upon giving security by recognisance of $500 to be of good behaviour for a period of 12 months. These are my reasons for joining in the decision.
6 At the material time the applicant was a senior executive and alternate director of Clifton Partners Finance Pty Ltd ("CPF"), a mortgage broker carrying on business in Western Australia. The applicant had no financial interest in the company.
7 In January 1999, Onslow Trading Co Pty Ltd ("Onslow Trading") applied to CPF for a loan of $2,520,000 for the construction of the first stage of a caravan park in South Hedland to be known as the Blackrock
(Page 4)
- Caravan Park. The borrower's plan was that the first stage of the project would be built with loan funds. The first stage would then open and generate funds sufficient to meet its interest commitments on the loan and to build the second stage of the caravan park. CPF approved the loan application on 20 January 1999.
8 The caravan park was to comprise 268 bays, a shop, a manager's residence, an office, a storage shed, ablution blocks and swimming pool. A large number of the bays were to have ensuite bathroom facilities.
9 The loan was raised in two tranches. The first tranche of $2,200,000 was raised pursuant to an information memorandum and letter of offer to investors. As construction progressed through 1999, payments were made from the loan funds in accordance with reports from a supervising builder in South Hedland.
10 In order to meet its obligation to Onslow Trading, CPF had to raise a further $320,000 from investors. By January 2000 the Managed Investments Act 1998 (Cth) had come into force and CPF was required to issue a prospectus in order to raise the funds. The applicant was responsible for the preparation and contents of the prospectus which consisted of two parts. The second part of the prospectus contained an application form and specific information regarding the Blackrock Caravan Park project. The prospectus contained the two materially misleading statements identified in the indictment. The prospectus stated that "As at 31/01/00 we have raised $2,200,000 and a further $320,000 is to be raised this month to finalise the total loan to enable the borrowers to complete the project …" ("the first statement"). In fact, approximately $1.6 million was required to complete the project.
11 The prospectus also stated that "Works are nearing the final stages and the caravan park should open by the end of February" ("the second statement"). The second statement was materially misleading in that the caravan park was far from final completion. As at 1 February 2000, only 56 overnight bays were completed or almost completed, 50 to 66 ensuite sites were completed or almost completed and the ablution block was almost completed.
12 During the period between 3 February 2000 and 1 March 2000 five investors relied on the prospectus and invested a total sum of $195,000. Onslow Trading went into voluntary liquidation in mid-May 2000. The investors recovered a portion of their investments, leaving a combined loss of approximately $126,750.
(Page 5)
13 The applicant is in his early fifties and had no prior convictions. He worked at a bank for 22 years as a lending officer and in managerial positions. Numerous references were tendered to the sentencing Judge and they attested to his good character and work within the community.
14 The applicant contended that the sentence imposed was manifestly excessive having regard to:
(1) the nature and circumstances of the offences;
(2) the applicant's antecedents and prior good character;
(3) the alleged excessive weight given to the need for general deterrence; and
(4) the alleged failure to adequately consider the mitigatory factors in making the recognisance release order.
15 An appellate court is not entitled to intervene merely because it would have exercised the sentencing discretion in a manner different from the sentencing Judge: Lowndes v The Queen (1999) 195 CLR 665. It is entitled to intervene if a material error of fact or law is discerned in the sentencing Judge's reasoning. Alternatively, error may be inferred if the result is unreasonable or unjust or, more commonly, is manifestly excessive. A sentence may be manifestly excessive because, among other things, the term imposed is manifestly too long: Dinsdale v The Queen (2000) 202 CLR 321 at 324 - 325.
16 To assist in determining whether a sentence is manifestly excessive, it is necessary to view it in the perspective of the maximum sentence prescribed by the law for the crime, the standards of sentencing customarily observed with respect to the crime, the place which the criminal conduct occupies on the scale of seriousness of crimes of that type and the personal circumstances of the offender: R v Chan (1989) 38 A Crim R 337 at 342.
17 The maximum penalty for an offence under s 999 of the Act is 5 years' imprisonment or a fine of $20,000. The sentencing Judge accepted the applicant had to be sentenced on the basis that he ought reasonably to have known the statements were materially misleading rather than he knew them to be so. In addition, the Judge accepted that, save for his share of the commission he received on initial negotiation of the loan to Onslow Trading, the applicant did not profit from funding the balance of the approved loan, concluding that he had let his "standards
(Page 6)
- slip". It was also accepted that little or no weight should be given to personal deterrence as the applicant was unlikely to reoffend.
18 It is clear the sentencing Judge placed very considerable weight on the need for general deterrence, relying, by way of analogy, on the offence of stealing as a servant. A relationship of trust and difficulties of detection are two factors that increase the weight to be given to general deterrence. However, a mortgage broker soliciting funds for and on behalf of a borrower does not have a relationship of trust and confidence with potential investors in the sense in which that relationship is generally understood. Even so, it is clearly the case that investors would be expected to rely on the accuracy of information supplied by the finance broker. Further, there are no special difficulties in identifying and proving cases of the kind in question, in particular where reliance is placed on what a defendant ought reasonably to have known.
19 The respondent referred the Court to a number of unreported decisions involving sentences imposed on offenders for conduct contrary to s 999 of the Act. As is to be expected, the sentences reflect the individual circumstances of each case and vary between 1 year's imprisonment to be released on the offender's own recognisance after serving 3 months to 2 and a half years' imprisonment to be released on the offender's own recognisance after serving 8 months. The authorities provide no more than a very general guide as to the appropriate penalty.
20 In the circumstances of this case, the applicant's criminal conduct was at the lower end of the scale of seriousness of offences of this type. In particular, he was not found to have been engaged in deliberate fraud and was not motivated by personal profit. He had been of exemplary character and made a significant contribution to his community. The seriousness of the offence and the need to deter other participants in the securities industry from engaging in such conduct justified the imposition of a term of immediate imprisonment. However, on all the facts, the sentence was too long. For that reason I joined in the orders made at the hearing.
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