Heaft v Police No. Scciv-04-14
[2004] SASC 37
•18 February 2004
DARREN HEAFT v POLICE
[2004] SASC 37
Magistrates Appeal: Criminal
BESANKO J: This is an appeal against sentence by a defendant.
The defendant was charged with in excess of 64 counts of falsification of accounts contrary to s 178(1)(a) of the Criminal Law Consolidation Act 1935 (SA). On 18th December 2003 the defendant appeared in the Adelaide Magistrates Court and pleaded guilty to 64 of the charges. The Magistrate imposed one penalty (s 18A Criminal Law (Sentencing) Act 1988 (“CLSA”)) being a term of imprisonment of five years and ten months with a non-parole period of three years. The Magistrate’s starting point was eight years which she said she reduced by 20% by reason of the defendant’s pleas of guilty, six months by reason of the fact that the defendant had spent a period of a little over six months in custody in Canada and two months by reason of a period the defendant had spent on home detention bail in South Australia.
The Facts
A statement of agreed facts was put to the Magistrate setting out the nature of the defendant’s offending and the background to that offending. Much of what follows is taken from that statement.
The offences to which the defendant pleaded guilty occurred in the course of the defendant’s employment with Schenker Australia Pty Ltd (“Schenker”). Schenker operates as an international freight forwarding and customs agent arranging the import and export of cargo interstate and overseas.
The defendant had worked with Schenker and a predecessor company since 1981 and he was employed as a sea freight manager. The defendant’s duties included negotiating costing of contracts with Schenker customers, registering seafreight export shipments, acceptance of accounts payable, the generation of cheques to pay such accounts, the preparation and distribution of client invoices, and the subsequent entering of information into Schenker’s operational software program.
In November 1999 a number of anomalous export consignments were discovered in the Seafreight Export Department of Schenker. A number of incomplete export consignments were found to have incorrect details as to the identity of the exporter and consignee and the weight and dimensions of the consignment recorded on internal documents.
Schenker’s general manager spoke to the defendant concerning these anomalies and the defendant asserted that the anomalies in the consignments were due to the fact that he had extended unauthorised credit to customers. Over the next several weeks the defendant raised accounts to a number of non-existent companies and assured Schenker’s general manager that the accounts would be paid. Concern over the anomalies continued within Schenker during January 2000 and the general manager travelled to Sydney to discuss the situation with Schenker’s directors, and the managing director of Schenker in Australia travelled to Adelaide to discuss the situation with the defendant. On 28th January 2000, the defendant failed to attend at work and could not be located.
A subsequent investigation revealed that the defendant commenced committing the offences in 1994 and that they continued from that time to 1999. The defendant had been in effect skimming money from Schenker accounts by causing fabricated additional costs to be placed against legitimate jobs when the actual costs of the job were lower than the price fixed between Schenker and its customers. The defendant diverted to himself the difference between the actual cost and the cost as shown in the invoice. The defendant’s seniority enabled him to conceal his offending by manipulating the data entered into Schenker’s operational software program.
By the above means, the defendant obtained the sum of $351,247.66 between 1994 and 1999. This amount consisted of:
1 27 cheques totalling $144,449.09 diverted to the Murrawonda Arab Stud business operated by the defendant and his then partner Ms Dianne Kajar;
2 28 cheques totalling $131,831.56 diverted to the defendant’s National Australia Bank MasterCard account;
3 2 cheques totalling $9,962.02 diverted to accounts in the name of the defendant and Ms Kajar; and
4 7 cheques totalling $65,004.99 diverted to third parties.
The defendant fled to Canada in early 2000. He began a new relationship and was married in 2001. The defendant was arrested in November 2002 and served six months and 12 days in detention centres in the Province of Ontario. The Magistrate acknowledged that the defendant experienced “difficult conditions” whilst in detention in Ontario. The defendant did not oppose extradition proceedings and was extradited to Australia in May 2003. Thereafter, he indicated that he would plead guilty to the charges. He was placed on home detention bail.
In the hearing before the Magistrate a great deal of character evidence was put forward by the defendant both in written form and by way of oral evidence. The defendant also put before the Magistrate an affidavit from a solicitor and barrister practising in Ontario wherein the deponent expressed the view that if sentenced in Ontario the defendant would receive at least an enhanced reduction of twice the time he had spent in custody and he gave his reasons for expressing that view.
Grounds of Appeal
The defendant put forward three main grounds of appeal.
First, the defendant submits that although the Magistrate said that she would reduce her starting point of eight years by 20% because of the defendant’s pleas of guilty, she in fact reduced the starting point by a little under 20%. That assertion is correct, and on my calculations the reduction fell short of 20% by one month and about six days.
Secondly, the defendant submits that the Magistrate placed too much weight on general deterrence and too little weight on the fact that he is unlikely to offend again, and that his rehabilitation was due to his own efforts. The defendant also refers to the fact that he had no convictions and was of prior good character. The defendant acknowledges that the fact of his prior good character and the fact that he is unlikely to offend again are of modest relevance in the case of white-collar crime. Nevertheless, says the defendant, the Magistrate did not give those matters sufficient weight, and she over-emphasised the punitive purpose of sentencing in cases of this nature. The defendant refers to a line of cases which state that considerable weight should be given to the fact that a defendant has rehabilitated himself even though that has occurred during a period between the defendant absconding and his apprehension.
Thirdly, the defendant submits that the Magistrate erred in not making a greater reduction for the period of six months and 12 days the defendant spent in custody in Canada. The Magistrate should have made a reduction of at least 12 months and 24 days. A subsidiary submission was put that even if a one for one reduction was appropriate, the Magistrate erred in making a reduction of six months and not a reduction of six months and 12 days.
The Magistrate’s Reasons
I turn now to consider the Magistrate’s reasons.
In her sentencing remarks, the Magistrate referred to a written report and oral evidence of the psychologist, Dr Jack White. She referred to his opinion to the effect that the likelihood of the defendant re-offending was small. The Magistrate said that she needed to bear in mind the need for personal and general deterrence. She referred to the decisions of the Court of Criminal Appeal in R v Davies (1996) 88 A Crim R 226 and R v Powell (2001) 81 SASR 9, and said that those cases emphasised the fact that general deterrence must be the paramount consideration in cases of large-scale systematic fraud. The Magistrate considered that the defendant’s offending was at the higher end of the scale when regard was had to the fact that it occurred over a period of about five years, the fact that a substantial sum of money was involved and the fact that there was no prospect of restitution. The Magistrate said that the authority of R v Davies (supra) established that previous good character must count for little.
The Magistrate took into account that the offending was deliberate, well-organised and sophisticated and that it was carefully designed to avoid discovery. She identified, as further features of aggravation, the fact that the defendant did not stop his offending voluntarily, but rather only when discrepancies were detected by others at which time he lied about what he had done. The Magistrate also referred to the effect of the defendant’s conduct on his colleagues and employer.
The Magistrate gave the defendant credit for the fact that whilst in Canada he was law-abiding and had not re-offended. She also took into account the impact the defendant’s imprisonment will have on his family, although she noted that the defendant had married and then continued his relationship in the knowledge that one day he would have to face the charges against him. Although the Magistrate noted these matters, she said that they must be given relatively little weight when balanced against the seriousness of the defendant’s offending.
In relation to the allowance to be made for the period the defendant spent in custody in Canada, the Magistrate said that enhanced credit may be the position in Canada, but she was satisfied that different rules applied in Canada to give credit for time spent in detention.
Issues on Appeal
It is convenient to deal first with the defendant’s submission that the sentence is manifestly excessive because the Magistrate placed too much weight on general deterrence and too little weight on the fact that he is unlikely to offend again, and that his rehabilitation was at least in part due to his own efforts.
I reject this submission.
In R v Chisholm (1985) 122 LSJS 230, King CJ said (at 232):
“The systematic course of dishonesty undoubtedly calls for a substantial sentence and there is, moreover, the important aspect of deterrence. The courts have a responsibility to impose sentences upon those who abuse the trust which is placed in them which will operate as a deterrent to others in a position of trust who might either for psychological or any other reason experience the temptation to take what does not belong to them.”
In R v Davies (supra), Cox J said (at 470):
“The respondent had no previous convictions and he called character evidence, but both those apparently favourable matters were heavily qualified by the fact that this was a series of 19 serious offences spread over a period of two and a half years. Furthermore, as Ms Abraham emphasised, crimes of this sort are usually committed by respectable people of good standing – that is how they come to be in positions of trust which they are able to exploit to their own advantage. The deterrent effect of a sentence or non-parole period upon other people of good reputation, in a similar position and similarly tempted, would be substantially diminished if persons who commit a series of offences of this kind are still given substantial credit for their previous good character. Nor for the same reason should much allowance be made for the circumstances that, as is almost always the case, such a defendant is unlikely to offend again.”
(See also R v Powell (supra).)
Having regard to these authorities and R v Ashdown (1994) 72 A Crim R 63 and R v Cavanagh [1999] SASC 418, the Magistrate did not err in placing significant weight on the need for deterrence, and relatively little weight on prior good character and the likelihood of re-offending. The defendant submits that the principles laid down in these cases are qualified by another principle which has been developed in the cases. The principle is that if in fact a defendant has rehabilitated himself between the date of the offending and the date of sentencing, then that fact is to be given great weight compared with the consideration of general deterrence. The fact that the defendant’s rehabilitation has taken place after the defendant has absconded and while he has remained at large does not mean that the court will not give significant weight to the fact that the defendant has rehabilitated himself, although the court will be careful not to give credit to a defendant who has absconded. Ordinarily, the fact that a defendant has absconded is an aggravating feature. The cases to which the defendant referred suggest that although the fact that the defendant has absconded has given him the opportunity to live a law-abiding life suggesting rehabilitation, the fact that the defendant has absconded does not negate the importance in sentencing of the rehabilitation which has taken place. It seems to me that the application of the principle will very much depend on the particular circumstances of the case. The principle has been discussed and applied in a number of cases including R v Carl Victor Bird (1987) 9 Cr App R (S) 77, Dibble v The Queen (unreported, Court of Criminal Appeal, 2 November 1990) and Stanitzki v Higgins (1994) 63 SASR 309.
The defendant submits that the Magistrate gave insufficient weight to this principle bearing in mind the fact that the defendant had rehabilitated himself, as shown by the fact that he lived modestly and within the law in Canada for two years after he had absconded.
In my opinion, the principles laid down in cases like R v Chisholm (supra) and R v Davies (supra) are clearly stated and I do not think that they admit the qualification suggested by the defendant. They are statements which are binding on me. The fact that the defendant is unlikely to offend again is to be given relatively little weight. Importantly, as has been said in a number of cases, the nature of the relevant offences means that that will almost always be the case.
The Magistrate did not err in the weight she gave to the fact that the defendant had rehabilitated himself to the extent recognised in the Magistrate’s sentencing remarks and to the fact that the likelihood of re-offending was small.
The defendant further submits that the Magistrate gave insufficient weight to the fact that he was of good character before he committed the offences. The defendant refers to the observations of McHugh J in Ryan v The Queen (2001) 206 CLR 267 (at [36]) to the effect that the fact that the defendant was otherwise of good character must be taken into account, although the weight to be placed on good character will vary according to all the circumstances of the case. The Magistrate took into account the fact that the defendant was otherwise of good character, although she said that it did not count for much in the circumstances of the case and having regard to the principles set out in cases like R v Davies (supra). There is no inconsistency between the statements of McHugh J in Ryan v The Queen (supra) and the statements in cases like R v Davies (supra). Good character is taken into account in cases of large scale systematic fraud, but it is given relatively little weight compared with the importance of general deterrence. As has been observed on a number of occasions, invariably the defendants in cases like the present one are of prior good character, a fact which has meant that they are in a position whereby they are able to commit such crimes. The Magistrate did not err in the weight she placed on the fact that the defendant was of previous good character.
The appropriateness of the sentence imposed by the Magistrate may be tested in another way. First, I note that the Magistrate fixed a non-parole period which represents a little over 50% of the head sentence. That cannot be said to be excessive or inappropriate. Secondly, although all cases are different, the sentence imposed by the Magistrate is not obviously excessive when compared to similar cases. In R v Davies (supra) the defendant was convicted of eighteen counts of fraudulent conversion involving a total sum of $490,000 of which $50,000 had been repaid to the victim. The sentencing Judge imposed a sentence of six years imprisonment with a non-parole period of two and a half years. On appeal, the Court of Criminal Appeal increased the non-parole period to four years. In R v Powell (supra) the defendant was charged with 52 counts of falsifying accounts over a two year period and involving a sum of about $670,000. The sentencing Judge said that he would have imposed a term of imprisonment of eight years but for the defendant’s guilty plea, remorse and co-operation. He imposed a head sentence of five years and six months and a non-parole period of two years. The Court of Criminal Appeal allowed an appeal by the Director of Public Prosecutions and increased the head sentence to seven years and the non-parole period to three and a half years. It is true that there was a larger sum of money involved in R v Powell (supra), but at the same time, the offending in this case occurred over a longer period of time. In my opinion, it cannot be said that a head sentence of five years and ten months and a non-parole period of three years is manifestly excessive. In fact, I would go further and say that although it is no doubt substantial, the sentence is not at or near the upper limit of the range of appropriate sentences for the offences committed by the defendant. This is important when I come to consider the two, what I might call, mathematical errors made by the Magistrate.
I turn now to the defendant’s submission that the defendant should have been given enhanced credit for his period of custody in Canada because that is what would have occurred if he had been sentenced there. The defendant referred to Mr G Lafontaine’s affidavit and to two Canadian authorities where enhanced credit was given having regard to the conditions in the pre-trial detention centres (R v Kravchov (2002) 4 CR (6th) 137 and R v Wust [2000] 1 SCR 455). As I have said, the Magistrate rejected the submission that she should give enhanced credit for the time the defendant spent in custody in Canada.
Section 30(2) of the CLSA provides:
“(2) Where a defendant has been in custody in respect of an offence for which the defendant is subsequently sentenced to imprisonment, the court may-
(a) make an appropriate reduction in the term of the sentence, having regard to the period for which the defendant has been in custody; or
(b) direct that the sentence be taken to have commenced on the day on which the defendant was taken into custody.”
In my opinion, the terms of s 30(2)(a) are such that the court may reduce the term of the sentence having regard to the period for which the defendant has been in custody, but does not permit the court to reduce the term of the sentence having regard to the conditions under which the defendant has been in custody. Accordingly, I reject the defendant’s argument. Even if I am wrong in taking that approach, in my opinion, a greater than one for one reduction would only be justified if there was evidence that the conditions for pre-trial custody in Canada were worse than they were in South Australia. There is no evidence to that effect, and I am not prepared to assume that it was the case. The Magistrate did not err in proceeding on the basis that no more than a one to one reduction was appropriate.
It does appear that the Magistrate did not quite allow a 20% reduction for the defendant’s pleas of guilty, and that she did not allow an exact one for one reduction for the time the defendant spent in custody in Canada. On my calculations, a full allowance for those matters would have resulted in a reduction of a further one and a half months approximately. For the reasons I have already given, even if these errors justified the setting aside of the sentence and the re-sentencing of the defendant by me, I would not impose a lesser sentence than that imposed by the Magistrate.
Conclusion
For these reasons the appeal must be dismissed.
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