Johnston v R

[2017] NSWCCA 53

Court of Criminal Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Johnston v R [2017] NSWCCA 53

Hearing dates:

31 January 2017

Date of orders:

27 March 2017

Decision date:

27 March 2017

Before:

Bathurst CJ at [1]; Johnson J at [76]; Fagan J at [77]

Decision:

1. Grant the applicant an extension of time to apply for leave to appeal against the sentence imposed on him.

2. Grant the applicant leave to appeal.

3. Dismiss the appeal.

Catchwords:

CRIMINAL LAW – appeal – sentencing – white-collar crime – fraud offences – rolled up counts – gambling addiction – relevance of gambling addiction at sentence – whether gambling addiction mitigating factor – whether error in remarking that gambling addiction cannot be equated with drug addiction at sentence – whether error in assessment of the objective seriousness of the offence – rehabilitation – whether error in consideration of rehabilitative actions occurring after arrest – whether insufficient weight given to reparation, good character and first offender status – whether manifestly excessive

Legislation Cited:

Corporations Act 2001 (Cth) s 1041G
Crimes (Sentencing Procedure) Act 1999 (NSW) s 11
Crimes Act 1900 (NSW) s 192E
Sentencing Act 1991 (Vic) s 6H

Cases Cited:

Assi v R [2006] NSWCCA 257
Bland v The Queen (2014) 241 A Crim R 51; [2014] NSWCCA 82
Dinsdale v The Queen (2000) 202 CLR 321; [2000] HCA 54
Hanna v R [2015] NSWCCA 326
Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45
House v The King (1936) 55 CLR 499; [1936] HCA 40
Kentwell v The Queen (2014) 252 CLR 601; [2014] HCA 37
Le v R [2006] NSWCCA 136
Lowndes v The Queen (1999) 195 CLR 665; [1999] HCA 29
Marks v R [2009] NSWCCA 24
McLaren v R [2012] NSWCCA 284
Muldrock v The Queen (2011) 244 CLR 120
Ourdi v The Queen (2009) 193 A Crim R 381; [2009] NSWCCA 46
Power v R [2002] NSWCCA 244
R v Chen [2015] NSWCCA 122
R v De Leeuw [2015] NSWCCA 183
R v Donald [2013] NSWCCA 238
R v Glynatsis (2013) 230 A Crim R 99; [2013] NSWCCA 131
R v Grossi (2008) 183 A Crim R 15; [2008] VSCA 51
R v Hawker [2001] NSWCCA 148
R v Henry (1999) 46 NSWLR 346; [1999] NSWCCA 111
R v Huang, R v Siu (2007) 174 A Crim R 370; [2007] NSWCCA 259
R v Martin [2005] NSWCCA 190
R v McDonald (1994) 71 A Crim R 370
R v Molesworth [1999] NSWCCA 43
R v Richard [2011] NSWSC 866
R v Roussety (2008) 24 VR 253; [2008] VSCA 259
R v Todorovic [2008] NSWCCA 49
R v Woodman [2001] NSWCCA 310

Category:

Principal judgment

Parties:

Bruce Alan Johnston (Applicant)
Crown (Respondent)

Representation:

Counsel:
R Mathur (Applicant)
E Balodis (Respondent)

Solicitors:
Phillip Ryan Solicitors (Applicant)
Solicitor for Public Prosecutions (Respondent)

File Number(s):

2014/219634

 Decision under appeal 

Court or tribunal:

District Court of New South Wales

Jurisdiction:

Criminal

Date of Decision:

5 June 2015

Before:

Williams AJ

File Number(s):

2014/219634

HEADNOTE

[This headnote is not to be read as part of the judgment]

The applicant was employed by a mining company as a senior accountant. Over a period of 3 years, the applicant prepared 156 false invoices which were paid by the company into accounts controlled by the applicant. The total amount defrauded was $1,257,847.25. It was dissipated in gambling.

The applicant was charged with and pleaded guilty to a single count of obtaining a financial advantage by deception contrary to s 192E(1)(b) of the Crimes Act 1900 (NSW). The offence carries a maximum penalty of 10 years imprisonment.

Prior to sentencing, the applicant reached a settlement with his former employer which involved him paying the company $250, 000 in consideration of a release from further liability. The applicant had a gambling addiction and had begun therapy to address this problem, completing an eight week residential rehabilitation program prior to sentencing.

The sentencing judge imposed a sentence of 6 years and 6 months imprisonment, with a non-parole period of 4 years. This was arrived at after allowing a discount of 25% for the utilitarian value of his early guilty plea. In the remarks on sentence, the sentencing judge described the offence as involving a substantial breach of trust and expressed the view that there were differences between a gambling and drug addiction for the purposes of sentencing. He stated that gambling does not physically alter a person’s mind or body and that a gambler knows what he or she is doing.

The issues on appeal were:

1. Whether the sentencing judge erred with respect to the weight he placed upon the gambling addiction and its relevance in assessing the objective seriousness of the offending;

2. Whether the sentencing judge erroneously applied a hierarchy to addiction placing the gambling addiction below that of drug addiction;

3. Whether the sentencing judge erred in his consideration of the offender’s rehabilitation by distinguishing between those who seek help at an early stage and those who seek help after being charged;

4. Whether the sentencing judge erred in placing insufficient weight upon the cumulative effect of factors in mitigation including restitution, good character and the applicant’s first-time offender status; and

5. Whether the sentence was manifestly excessive.

The Court held (Bathurst CJ, Johnson and Fagan JJ agreeing), dismissing the appeal:

The gambling addiction

(i)    The fact that offences were committed to feed a gambling addiction will not generally be a mitigating factor at sentence, even where it is pathological. This is particularly so in cases where general deterrence is an important factor and the offences are planned and perpetrated over an extended period: [36]-[38] (Bathurst CJ); [76] (Johnson J); [77] (Fagan J).

R v Molesworth [1999] NSWCCA 43; R v Todorovic [2008] NSWCCA 49; R v Huang, R v Siu (2007) 174 A Crim R 370; [2007] NSWCCA 259; Marks v R [2009] NSWCCA 24; Le v R [2006] NSWCCA 136; Assi v R [2006] NSWCCA 257; Ourdi v The Queen (2009) 193 A Crim R 381; [2009] NSWCCA 46 applied.

(ii)    A gambling addiction will not generally reduce moral culpability where the offence is committed over an extended period as the offender has a degree of choice as to how they finance their addiction. The disorder will not often be connected to the crime but merely provide a motive or explanation for its commission, and is therefore only indirectly responsible for the offending conduct: [38] (Bathurst CJ); [76] (Johnson J); [77] (Fagan J).

R v Grossi (2008) 183 A Crim R 15; [2008] VSCA 51 applied.

(iii)   The sentencing judge did not postulate a hierarchy of addiction placing gambling below drugs, but was simply stating that unlike some cases of drug addiction the applicant did not lack the capacity to exercise judgment nor was the crime something other than a willed act. The fact that gambling addiction is listed in DSM-V does not indicate to the contrary: [42]-[45] (Bathurst CJ); [76] (Johnson J); [77] (Fagan J).

R v Henry (1999) 46 NSWLR 346; [1999] NSWCCA 111 applied.

Rehabilitation

(iv)    There was no error in the sentencing judge’s consideration of rehabilitation. The remarks made distinguishing the applicant’s case from one where early intervention is sought go no further than saying that the circumstances of his rehabilitation meant that no sentencing option other than a custodial sentence was appropriate: [50] (Bathurst CJ); [76] (Johnson J); [77] (Fagan J).

Mitigating factors and manifest excess

(v)    The failure of a sentencing judge to attribute sufficient weight to a particular matter will not generally be a material error and the circumstances in which matters of weight will justify intervention are narrowly confined. There is no discernible error in the sentencing judge’s approach: [64]-[65] (Bathurst CJ); [76] (Johnson J); [77] (Fagan J).

Bland v The Queen (2014) 241 A Crim R 51; [2014] NSWCCA 82; Hanna v R [2015] NSWCCA 326 applied.

(vi)    An appellate court is not entitled to interfere with the exercise of the sentencing discretion merely because it would have arrived at a different result. For a sentence to be set aside as manifestly excessive it must be unreasonable or plainly unjust after taking all relevant matters into account: [66] (Bathurst CJ); [76] (Johnson J); [77] (Fagan J).

Lowndes v The Queen (1999) 195 CLR 665; [1999] HCA 29; Dinsdale v The Queen (2000) 202 CLR 321; [2000] HCA 54; Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45 applied.

(vii)    In considering the question of manifest excess it is relevant that the plea was to a “rolled up count” involving 156 fraudulent transactions, which meant the criminality involved was greater than a charge involving only one episode of criminal conduct: [68]-[70] (Bathurst CJ); [76] (Johnson J); [77] (Fagan J).

R v Richard [2011] NSWSC 866; R v De Leeuw [2015] NSWCCA 183; R v Glynatsis (2013) 230 A Crim R 99; [2013] NSWCCA 131; R v Donald [2013] NSWCCA 238 applied.

(viii)    The offences involved systematic defrauding in circumstances where the applicant was in a position of trust. General deterrence is of considerable importance. The offender’s prior good character is not a matter of great significance as generally only persons of good character are placed in a position of trust so as to enable the commission of these offences. The sentence is not manifestly excessive: [70]-[74] (Bathurst CJ); [76] (Johnson J); [77] (Fagan J).

R v Hawker [2001] NSWCCA 148; R v Woodman [2001] NSWCCA 310 applied.

Judgment

1. BATHURST CJ: The applicant, Bruce Alan Johnston, (the applicant) pleaded guilty to a single count of obtaining a financial advantage by deception contrary to s 192E(1)(b) of the Crimes Act 1900 (NSW). The offence carries a maximum penalty of 10 years imprisonment. There is no standard non-parole period.

2. A sentencing hearing took place on 27 March 2015, but sentencing was deferred under s 11(1)(a) of the Crimes (Sentencing Procedure) Act 1999 (NSW) (Sentencing Procedure Act) for the purpose of assessing the applicant’s prospects of rehabilitation by allowing him to complete an eight week rehabilitation programme in respect of his gambling addiction.

3. On 5 June 2015 the applicant was sentenced to a total term of 6 years and 6 months imprisonment, with a non-parole period of 4 years. The sentence was arrived at after allowing a discount of 25% for the utilitarian value of his early plea.

4. The applicant has sought leave to appeal out of time against the sentence. In an affidavit filed in support of the application, the solicitor for the applicant sought to explain the reasons for the delay. It is not necessary to set out these reasons in detail as the Crown accepted in argument that “the result of the appeal … will dictate whether leave is granted or not”.   

5. In Kentwell v The Queen (2014) 252 CLR 601; [2014] HCA 37, the plurality stated that an application to extend time will be determined by what is required in the interests of justice, a concept which the plurality recognised could pull in different directions: Kentwell at [32]. The plurality also stated that the prospects of success, should the extension be granted, is relevant to the determination: Kentwell at [33].

6. Although I do not regard Kentwell supra as stating that the prospects of success will always be the determinative factor, having regard to the Crown’s position, it is not necessary to go beyond that factor in the present case.

The facts

7. The facts are straightforward. The applicant was employed by Newcrest Mining Limited (Newcrest) as a senior accountant involved in the development of the Cadia East Mine. Between 1 July 2010 and 27 August 2013, the applicant prepared a total of 156 invoices in the name of “Bramph Consulting Services”, a false entity set up by him. The invoices, which purported to be for consultancy services in respect of the Cadia Mine project, were paid by Newcrest and transferred into accounts controlled by the applicant. The total amount paid was $1,257,847.25. It was dissipated in gambling.

8. The fraud was uncovered when it was revealed no GST was paid on the invoices. On 21 November 2013 the applicant was spoken to by Newcrest management and admitted his deception. He was arrested and charged on 25 July 2014.

9. Other factors relevant to the sentence are contained in the sentencing judgment which I have summarised below.

The sentencing judgment

10. The sentencing judge noted that the applicant had no criminal record and that at the time of sentence he was 40 years of age, married, with two children aged 7 and 6.

11. The primary judge noted that since his graduation from a Bachelor of Business, majoring in Accounting and Finance, he worked in North Sydney until his relocation to Orange. He noted that the applicant was employed by “Cadia Newcrest” as a senior accountant. He noted that following his dismissal the applicant was employed as a labourer, although from 14 September 2014 to 15 February 2015 he was employed as chief financial officer with a large cherry orchard enterprise. The sentencing judge stated that the employer confirmed that the applicant was forthright regarding his offences and that he had had no qualms in offering him employment to manage the company’s finances and administration throughout the harvesting season.

12. The sentencing judge noted that the applicant was currently midway in post-graduate studies for a Master of Business Administration at Deakin University. He noted that the applicant was not suffering from any mental health issues, although he had been receiving regular psychological counselling.

13. The sentencing judge noted that the applicant had reached a confidential settlement with Newcrest. The evidence established that this involved him paying the company $250,000 in consideration of a release from further liability. The evidence also established that this effectively enabled him to preserve the family home.

14. The primary judge referred to the applicant’s evidence concerning his gambling activities. He noted the applicant stated that he had a problem with gambling since he was a teenager but had not admitted to it. His Honour noted the applicant described the offences, the subject of the charge, as opportunistic.

15. The sentencing judge stated that the applicant fully accepted responsibility for his offences and had made efforts to deal with his addiction by completing the St John of God residential rehabilitation program.

16. His Honour noted that the applicant’s psychiatrist, Dr Krishnaswamy, had advised Community Corrections that the applicant had only just begun his therapy for an addictive disorder which required long term professional intervention to address it. The sentencing judge noted that the applicant was assessed as being at a low risk of reoffending.

17. The sentencing judge noted that Dr Krishnaswamy expressed the view that once the applicant completed the rehabilitation at St John of God, he should continue his appointments with the gambling counsellor at Lifeline and attend Gambling Anonymous meetings. She stated that “[i]f able to participate in the above programs and with continued support from his family and social networks”, she expected that the prognosis was good. The sentencing judge noted that for the 15 months during which he had stopped gambling, he had been gainfully employed.

18. The sentencing judge set out in detail a series of references attesting to the applicant’s good character.

19. His Honour also set out the following 11 factors which he said would affect the appropriate sentence:

“1.   The offending seems to have commenced fairly shortly after he started his employment with Newcrest.

2.   The offending behaviour occurred regularly over a period of just over three years.

3.   The offender was in a position of trust.

4.   The amount defrauded was substantial.

5.   The offender appears to be an intelligent, well-educated man.

6.   There appears to have been no attempt to deal with any gambling problem at any stage prior to him being found out years after he started offending.

7.   Having regard to what Latham J said in Li v VR [sic] [2006] NSWCCA 136, a gambling addiction generally does not warrant the extension of leniency.

8.   The plea of guilty was immediate and deserving of the maximum discount, 25%.

9.   Mr Johnston is aged 40 and was of prior good character before he started this offending.

10.   A person is usually in a position of trust because of their prior good character, which in turn of course is the enabling factor in being able to offend in such a way that good character may not have a substantial effect on the sentencing process for such matter [sic].

11.   Having regard to the case of Scanlon [2006] NSWCCA 238, the JIRS statistics and case comparisons have little relevance in the sentencing process, although a recent case of Chen v R [2015] NSWCCA 122 has provided some comfort as to an appropriate sentence.”

20. The sentencing judge described the offence as involving a substantial breach of trust. He expressed the view that there were differences between a gambling addiction and a drug addiction. He stated gambling does not physically alter a person’s mind or body. He stated a gambler knows what he is doing. He said that the concern in the present case was that, despite knowing his gambling was causing him to steal, he did not do anything until he was confronted by his employer.

21. In that context the sentencing judge stated that his addiction did not explain why it had taken over 3 years and the theft of one and a quarter million dollars before the applicant sought professional help. He described the applicant’s evidence, “I knew it was a problem but I just couldn’t help myself”, as not sufficient.

22. The sentencing judge stated that he realised imprisonment would be devastating on the applicant’s wife and family, as the applicant’s wife would be the sole breadwinner and suffered a recurring chronic back condition.

23. His Honour noted that fraud matters, such as those in question, were relatively easy to commit by a person in a position of trust and quite often very large sums of unrecoverable money were lost. He stated that such cases needed to be publicly denounced to deter others from offending and that the offender needed to be adequately punished.

24. In those circumstances, the sentencing judge imposed the sentence to which I have referred above.

The grounds of appeal

25. The applicant relied on the following grounds of appeal:

“1.   His Honour erred with respect to the weight he placed upon the causative gambling addiction and its relevance in assessing the objective seriousness of the offending.

2.   His Honour erred in applying a hierarchy to addiction placing the applicant’s gambling addiction below that of the drug addiction.

3.   His Honour erred in his application of the principle of demonstrated rehabilitation.

4.   His Honour erred in placing insufficient weight upon the cumulative effect of factors in mitigation, including restitution, good character and a first custodial sentence.”

26. During the course of argument on Ground 4, the applicant sought and was granted leave to rely on an additional ground of appeal, namely, that the sentence was manifestly excessive. It was common ground that the argument on Ground 4 raised similar issues as the ground of manifest excess. In these circumstances it is convenient to deal with these grounds together. It is also convenient to deal with Grounds 1 and 2 together.

Grounds 1 and 2

The submissions

27. The applicant submitted there was clear evidence he had a gambling addiction which he submitted propelled the offending. He pointed to the fact that expert evidence was led to the effect that at the relevant time, he suffered from a gambling disorder as defined under the Diagnostic and Statistical Manual of Mental Disorders (DSM-V). He pointed to the evidence of rehabilitative steps he had taken including the rehabilitation programme which led to the prolonging of the sentencing proceedings, with the intimation by the sentencing judge that this would result in an adjustment of the non-parole period.

27. The applicant submitted that there was no evidential basis for the finding made by the sentencing judge that, “[g]ambling does not physically alter a person’s mind”, submitting the fact that it is included in DSM-V evidences that it does. He submitted that it was required to be taken into account in the finding of objective seriousness. In that context he referred to what was said by Wood CJ at CL in R v Henry (1999) 46 NSWLR 346; [1999] NSWCCA 111 at [273], to the effect that the fact that an offence is motivated by a need to support a drug habit may be taken into account, inter alia, so far as it throws light on the state of mind or the capacity of the offender to exercise judgment.

28. The applicant recognised that in Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39, the plurality stated (at [27]) that the objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender. However, he submitted, referring to McLaren v R [2012] NSWCCA 284 at [29], that this did not derogate from the requirement of a sentencing judge to form an assessment as to the moral culpability of the offending, in respect of which the offender’s mental state may be taken into account. The applicant submitted the judge erred in failing to take the gambling addiction into account in that fashion.

29. Counsel for the applicant submitted, referring to the evidence of Dr Krishnaswamy, that there was a difference between a problem gambler and someone who has a clinical condition. She submitted that the evidence ruled out that it was a crime committed for greed or to support a lavish lifestyle. She submitted that the applicant’s inability to stop gambling, whilst not disabling him from making a determination between right and wrong, impaired his judgment. She also submitted that the inability to stop gambling was inextricably linked to the commission of the offences.

30. In relation to Ground 2 the applicant submitted that the sentencing judge incorrectly applied a hierarchy of addiction placing gambling below drugs. He submitted that in doing so the sentencing judge distracted himself from the determination of the objective seriousness of the offence, of remorse and of the prospects of rehabilitation. He submitted that each of Spigelman CJ and Wood CJ at CL in R v Henry supra, rejected a hierarchy of motivations to obtain money. He repeated that the approach of the sentencing judge resulted in him failing to turn his mind to the evidence of rehabilitation and his low risk of reoffending.

31. The Crown pointing to Muldrock supra (at [27]), submitted that the sentencing judge would have been in error had he taken the applicant’s gambling addiction into account in assessing the objective seriousness of the offence, submitting that moral culpability and objective seriousness were not the same.

32. The Crown submitted that in drawing the distinction between drug addiction and gambling addiction, the sentencing judge was specifically concerned with the physical effects of each addiction. The Crown submitted that in stating, “the gambler knows what he or she is doing”, the sentencing judge was comparing the gambler with someone acting or offending under the chemical influence of a drug. The Crown submitted that there was no evidence that the applicant did not know what he was doing and that when he committed the frauds he was neither under the influence of any substance nor suffering from its withdrawal. It was submitted the applicant not only knew what he was doing but knew that it was a problem yet did not stop until he was caught.

33. The Crown also submitted that it was not put below that the applicant’s gambling addiction impacted the objective seriousness of the offence or the applicant’s moral culpability. It pointed to the fact that at the sentencing hearing, senior counsel for the applicant described the gambling addiction as properly going to “context”. In those circumstances it was submitted there was no error in failing to consider the matters the subject of this ground.

34. In relation to Ground 2 the Crown submitted there was nothing in the remarks on sentence to suggest that the sentencing judge placed the applicant in any special category for sentencing purposes. To the extent the ground sought to criticise the weight put by the sentencing judge on the respondent’s gambling addiction as a mitigating factor, it was submitted referring to Hanna v R [2015] NSWCCA 326 at [76], that the question of whether adequate weight was placed on a particular factor does not readily demonstrate House v The King (1936) 55 CLR 499; [1936] HCA 40 error.

Consideration

36. This Court has consistently held that the fact that offences were committed to feed a gambling addiction will not generally be a mitigating factor at sentence: R v Molesworth [1999] NSWCCA 43 at [24], [30]; R v Todorovic [2008] NSWCCA 49 at [62]; R v Huang, R v Siu (2007) 174 A Crim R 370; [2007] NSWCCA 259 at [42]; Marks v R [2009] NSWCCA 24 at [29]; Le v R [2006] NSWCCA 136 at [32]; Assi v R [2006] NSWCCA 257. In the latter case Howie J, with whom Tobias JA and Rothman J agreed, stated at [27] that although the gambling habit may explain the fall into serious criminal conduct, it is a rare case where the offender can seek mitigation of penalty based on an addiction to gambling even when it is pathological.

37. In Ourdi v The Queen (2009) 193 A Crim R 381; [2009] NSWCCA 46, the applicant sought to rely on his gambling habit in mitigation of offences of breaking and entering dwelling houses with intent to steal. In rejecting that submission Kirby J, with whom Grove and Blanch JJ agreed, noted (at [45]) that the crimes were not impulsive but on the contrary involved careful observation and planning. The same may be said of the applicant’s offence in the present case.

38. Similarly in R v Grossi (2008) 183 A Crim R 15; [2008] VSCA 51, the Victorian Court of Appeal stated that a gambling addiction will generally not reduce moral culpability where the offence is committed over an extended period, as the offender had a degree of choice as to how they would finance their addiction. The Court also explained that the disorder will not often be connected to the commission of the crime but merely provide a motive or explanation for its commission and so is therefore only indirectly responsible for the offending conduct. Redlich JA, with whom Neave and Vincent JJA agreed, stated (at [56]-[57]):

“[56]   Evidence may establish that an offender suffers from an impulse control disorder in the form of pathological gambling listed in DSM-IV-TR, the essential feature of which is ‘persistent and recurrent maladaptive gambling behaviour that disrupts personal family or vocational pursuits’. The relevance of the disorder to the sentence to be imposed, is then to be assessed in accordance with the principles restated in Verdins. That assessment will generally lead to the conclusion that the presence of a gambling addiction should not, on that ground alone, result in any appreciable moderation of the sentence. There are a number of reasons why that will be so. Firstly in most cases, the nature and severity of the symptoms of the disorder, considered in conjunction with the type and circumstances of the offending, will not warrant a reduction in moral culpability or any moderation of general deterrence. Secondly, it will frequently be the case that crimes associated with gambling addiction will have been repeated and extended over a protracted period. The long term chase to recoup losses is characteristic of those with such a disorder. Thirdly, in cases involving dishonesty, the crimes will commonly be sophisticated, devious, and the result of careful planning. Fourthly, the gravity of such offences, if there is a breach of trust or confidence, will commonly attract an increased penalty making such offences more appropriate vehicles for general deterrence. Fifthly, when offences of this nature are committed over extended periods, the prominent hypothesis will be that the offender has had a degree of choice which they have continued to exercise as to how they finance their addiction. This has often provided a reason for a general reluctance to temper the weight given to general deterrence or to reduce moral culpability because an offender has found it difficult to control their gambling obsession. Finally, and perhaps most importantly, the nexus of the addiction to the crime will often be unsubstantiated. The disorder will not generally be directly connected to the commission of the crime, the addiction providing only a motive and explanation for its commission. Hence, by contrast to a mental condition that impairs an offender’s judgment at the time of the offence, such addiction will generally be viewed as only indirectly responsible for the offending conduct.

[57]   The appellant’s conduct was premeditated, calculated, and systematic. Counsel for the appellant properly acknowledged that, to satisfy her addiction, the appellant had repeatedly exercised the choice to re-offend over a lengthy period and that this bore upon the weight to be given to her addiction. In my view the learned sentencing judge made no error in not mitigating the sentence to any significant extent because of the appellant’s gambling addiction. The existence of the disorder did not, on that ground alone, necessitate any reduction in moral culpability or amelioration of general deterrence” [Footnotes omitted].

I agree. Although the majority’s approach in Grossi supra in relation to the interpretation of ss 6H and 6I of the Sentencing Act 1991 (Vic) was not followed in a subsequent decision, the passage cited above was not criticised: see R v Roussety (2008) 24 VR 253; [2008] VSCA 259. I would add that in cases of this nature where general deterrence is an important factor, it would be inappropriate to treat an underlying explanation that the motive was gambling as a mitigating circumstance or reducing moral culpability particularly in cases such as the present, where the frauds were perpetrated and skilfully executed over an extended period.

39. Further it should be noted that the remarks in Grossi supra were made in circumstances where there was psychological evidence that at the time of the offending the applicant would have been diagnosed as having an impulse control disorder in the form of pathological gambling listed in the Diagnostic and Statistical Manual: [2008] VSCA 51 at [47].

40. The applicant in support of his submission relied on what was said by Wood CJ at CL in R v Henry supra. Each of Spigelman CJ and Wood CJ at CL stated that addiction including an addiction to drugs or gambling is not of itself a mitigating circumstance: (1999) 46 NSWLR 346 at [178]-[203], [273]. Wood CJ at CL in the passage cited in part by the applicant in his submissions, set out the relevant principles in the following terms:

“[273]   In my view the relevant principles are as follows:

(a)   the need to acquire funds to support a drug habit, even a severe habit, is not an excuse to commit an armed robbery or any similar offence, and of itself is not a matter of mitigation;

(b)   however the fact that an offence is motivated by such a need may be taken into account as a factor relevant to the objective criminality of the offence in so far as it may throw light on matters such as:

(i)   the impulsivity of the offence and the extent of any planning for it; cf R v Bouchard (1996) 84 A Crim R 499 at 501-2 and R v Nolan (Victorian Supreme Court, Court of Appeal, 2 December 1998, unreported);

(ii)   the existence or non-existence of any alternative reason that may have operated in aggravation of the offence, for example, that it was motivated to fund some other serious criminal venture or to support a campaign of terrorism;

(iii)   the state of mind or capacity of the offender to exercise judgment, for example, if he or she was in the grips of an extreme state of withdrawal of the kind that may have led to a frank disorder of thought processes or to the act being other than a willed act;

(c)   It may also be relevant as a subjective circumstance, in so far as the origin or extent of the addiction, and any attempts to overcome it, might:

(i)   impact upon the prospects of recidivism/rehabilitation, in which respect it may on occasions prove to be a two-edged sword: eg, R v Lewis (Court of Criminal Appeal, 1 July 1992, unreported);

(ii)   suggest that the addiction was not a matter of personal choice but was attributable to some other event for which the offender was not primarily responsible, for example where it arose as the result of the medical prescription of potentially addictive drugs following injury, illness, or surgery (cf R v Hodge (Court of Criminal Appeal, 2 November 1993, unreported) and R v Talbot ); or where it occurred at a very young age, or in a person whose mental or intellectual capacity was impaired, so that their ability to exercise appropriate judgment or choice was incomplete;

(iii)   justify special consideration in the case of offenders judged to be at the ‘cross roads’: R v Osenkowski (1982) 30 SASR 212; 5 A Crim R 394.

[274]   To go further, and to accept the fact of drug addiction as a mitigating factor generally, would not be justified in principle. Moreover, it would involve an exercise in irresponsibility on the part of the Court, if it were understood as a message that committing the crime of armed robbery to feed a drug habit is less deserving of censure than would otherwise be the case.

[275]   The legislature has, by the heavy maximum penalty prescribed for armed robbery, spoken clearly in relation to this offence. Drug dependent persons should not be encouraged, as a class, to think that they are free to engage in serious criminal conduct of whatever kind with impunity, or with any hope of favourable treatment because they are able to show that they needed money through their addiction.”

41. These comments apply equally to cases of fraud to feed a gambling addiction.

42. The applicant placed particular reliance on par 273(b)(iii) of the passage from the judgment of Wood CJ at CL cited above. However there was nothing to suggest that over the period in which the frauds were committed the applicant lacked the capacity to exercise judgment, or that the crime was anything other than a willed act. The fact the addiction is included in DSM-V does not indicate to the contrary.

43. In these circumstances Ground 1 has not been made out.

44. So far as Ground 2 is concerned it does not seem to me that the sentencing judge postulated a hierarchy of addiction placing gambling below drugs. The remarks complained of (see [20] above) were directed to the proceedings before him. The sentencing judge was simply stating that unlike some cases of drug addiction, the offender did not lack the capacity to exercise judgment, nor was the crime something other than a willed act.

45. In my opinion this ground has not been made out.

Ground 3

46. The applicant referred to the following remarks by the sentencing judge:

“Courts will exercise the full gamut of sentencing options to someone who offends but tries to do something about their offending behaviour and seeks help and intervention at an early stage. Mr Johnston’s gambling addiction does not explain why it took over three years and the theft of one and a quarter million dollars before he sought professional help.”

47. The applicant submitted that those remarks show that the sentencing judge took the view that only rehabilitative actions occurring early in the addiction were to be taken into account. He submitted that this approach did not accord with authority. He submitted that the absence of an early response to his gambling addiction should be assessed against the background that the gambling difficulties commenced at a young age (17 years) and the fact that gambling, “lawfully infects our daily lives and saturates all sporting mediums” and so, “provides fertile ground for unchecked and unnoticed addiction”. Counsel for the applicant further submitted that it was not appropriate to take the applicant’s rehabilitation into account only by adjusting the non-parole period.

48. The Crown submitted the applicant misinterpreted the criticised passage. It was submitted the applicant could not complain about being at a disadvantage because the nature of his offending meant he had to be charged by police as a prompt to commence treatment. The Crown submitted the applicant was sentenced in an appropriate fashion, with the serious extent of the fraud and the need for general deterrence properly being given determinative significance.

49. The Crown further submitted that the applicant’s demonstrated need for continued rehabilitation resulted in a finding of special circumstances and reduction in the non-parole period. The Crown submitted that the applicant’s rehabilitation was acknowledged by the sentencing judge deferring sentence to enable the applicant to complete a rehabilitation programme and in the variation of the statutory non-parole period ratio.

Consideration

50. The remarks made by the sentencing judge complained of do not seem to me to go further than to say that having regard to the fact that the offender did nothing about his addiction until he was apprehended meant sentencing options other than a custodial sentence were not appropriate. That is relatively clear from his remarks immediately following the passage of which complaint is made, to the effect that the applicant and his counsel recognised that a custodial sentence must follow and that although imprisonment will be devastating there were no exceptional circumstances justifying the non-imposition of a custodial sentence.

51. This ground is not made out.

Ground 4 and manifest excess

52. The applicant submitted that he had made significant restitution and it could be inferred that Newcrest, a commercial enterprise, was satisfied no more could be reasonably obtained from him. He submitted that showed significant remorse and warranted significant mitigation, or at least should have had an impact on the appropriate sentence. He submitted the fact of restitution was a statutory mitigating factor in s 21A(3)(i) of the Sentencing Procedure Act. He submitted that it was not clear that the sentencing judge had taken this matter into account.

53. The applicant also submitted that the “impressive testimonials” tendered by him were not taken into account by the sentencing judge, apparently because he took the view that good character is generally a necessary prerequisite to being in a position of trust to enable fraud to be engaged in. He submitted that this fact should not have stood in the way of some credit being given for good character.

54. The applicant also submitted that whilst the judge acknowledged the hardship of incarceration on a man without antecedent criminal history, it did not result in any mitigation of penalty.

55. The applicant submitted that a sentence of 8 years and 8 months pre-discount for an early plea gave little or no weight to the fact the applicant suffered from an addiction and the other relevant factors in his favour. Counsel for the applicant submitted that had they been taken into account, a sentence of 8 years and 8 months could not have been imposed.

56. Counsel for the applicant submitted that when Parliament laid down a maximum penalty of 10 years it was done in circumstances where Parliament knew that the offences could take place over a number of years and involve separate transactions. However, she accepted that there may be significant differences between the seriousness of one incident and engaging in conduct over 3 years which involved individual and not necessarily connected acts. However, she submitted the present case did not fall within the worst class of case.

57. In that context, counsel for the applicant referred to two cases. The first, Power v R [2002] NSWCCA 244, was a decision of a two judge bench of this Court. The applicant pleaded guilty to 39 offences of making a false instrument whilst a bank employee. The instruments in question were fictitious loans to fictitious customers. The amount involved was $5.81 million spent on luxury items. The offences occurred over a period of 4 years. A total sentence of 8 years with a non-parole period of 5 years was imposed. The Court held that the failure to impose a non-parole period in respect of a number of the offences and the non-parole period imposed on others led to the imposition of a sentence which was manifestly excessive. The Court did not vary the head sentences but substituted an effective non-parole period of 4 years.

52. The other decision, R v McDonald (1994) 71 A Crim R 370, was a decision of the Federal Court on appeal from the Supreme Court of the Australian Capital Territory. The applicant pleaded guilty to eight counts of fraud, the amount involved being some $632,000. Prior to being sentenced for these offences, he was convicted in the NSW District Court of various offences of fraud involving an amount totalling $951,000. He was sentenced to a term of imprisonment for these offences of 5 years with a non-parole period of 2 years.

53. The applicant was then sentenced for the Australian Capital Territory offences. The effect of the sentence was to increase the total term of imprisonment for all the offences to 8 years and 9 months and the non-parole period from 2 years to 4 years. The Federal Court held that the sentencing judge did not pay proper regard to the principle of totality and varied the sentence to impose a sentence of 7 years imprisonment with a minimum term of 3½ years.

54. Counsel for the applicant did not suggest that these cases indicated a range but pointed out that in neither of the two cases were the offences described as falling within the worst category.

55. The Crown noted the sentencing judge referred to the applicant’s restitution, remorse and to his good character. It was submitted that the authorities established that good character will be given less weight when general deterrence is important and the offence is one frequently committed by persons of good character.

56. The Crown referred to the reference by the sentencing judge to R v Chen [2015] NSWCCA 122, a Commonwealth prosecution involving the submission of 27 fraudulent business activity statements for the purpose of claiming false refunds of Goods and Services Tax. The total amount fraudulently obtained was $1,396,285.76. The applicant was sentenced to a total term of imprisonment for 10 years with a non-parole period of 6 years. Leave to appeal against sentence was refused. R A Hulme J (with whom Bellew and Davies JJ agreed) described the offence as involving repeated fraudulent claims as a part of a scheme to manipulate the self-reporting GST/BAS scheme solely for the applicant’s enrichment.

Consideration

63. To the extent that this ground asserts error in placing insufficient weight on the cumulative effect of the applicant’s restitution, good character and the fact that this was the applicant’s first custodial sentence in mitigation, the ground implicitly acknowledges that the judge did take these factors into account. That implicit acknowledgement is correct. The sentencing judge referred to the fact that the applicant had reached a confidential settlement with Newcrest, although presumably because of the claimed confidentiality, he did not refer to the precise amount paid. In relation to good character the sentencing judge referred to the testimonial from the manager of his employer immediately prior to sentence and set out in some detail the character references tendered on his behalf (see [11] and [18] above). He expressly noted the devastating effect that imprisonment would have on his wife and family.

64. As was pointed out in Bland v The Queen (2014) 241 A Crim R 51; [2014] NSWCCA 82 at [112]-[113] the failure of a sentencing judge to attribute sufficient weight to a particular matter will generally not be a material error and the circumstances in which matters of weight will justify intervention are narrowly confined: see also Hanna v R supra at [76].

65. In the present case it does not seem to me that the manner in which the matters referred to were taken into account of itself constituted error. The sentencing judge referred to these matters and clearly considered them as part of the process of determining the appropriate sentence. There is no discernible error in his approach. Those factors however are of course relevant factors to be taken into account in determining whether the sentence was manifestly excessive.

66. The principles on which an appellate court will determine that a sentence is manifestly excessive (or inadequate) are well established. An appellate court is not entitled to interfere with the exercise of the sentencing discretion merely because it would have arrived at a different result: Lowndes v The Queen (1999) 195 CLR 665; [1999] HCA 29 at [15]. For a sentence to be set aside as manifestly excessive it must be unreasonable or plainly unjust: Dinsdale v The Queen (2000) 202 CLR 321; [2000] HCA 54 at [6], [22], after taking all relevant matters into account: see also Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45 at [58]-[60].

67. In considering this issue I do not consider the two cases referred to by the applicant, Power v R supra and R v Macdonald supra, to be of particular assistance. The applicant correctly conceded that they did not constitute a range. I have set out the detail of these cases at [57]-[59] above. In Power, adjustment was made to take account of an effective non-parole period said to be manifestly excessive, whilst the adjustment in R v Macdonald was made having regard to the principle of totality. They provide no assistance in demonstrating a range of sentences for matters of this nature. As has been pointed out on a number of occasions, reference to statistics is of limited value in cases of fraud having regard to the variety of objective and subjective circumstances involved: R v Woodman [2001] NSWCCA 310 at [22]-[24]; R v Hawker [2001] NSWCCA 148 at [17]-[18]; R v Martin [2005] NSWCCA 190 at [56]. In each of these cases it was emphasised that greater assistance is derived from general sentencing principles with respect to white collar crime.

68. In considering the question of manifest excess it is necessary to pay regard to the fact that the plea was to a “rolled up count” involving 156 fictitious transactions. The question of sentencing on such a rolled up count was considered by Garling J in R v Richard [2011] NSWSC 866. The offender pleaded guilty to two offences contrary to s 1041G of the Corporations Act 2001 (Cth). The offences involved diverting $26.6 million of superannuation funds into tax havens over a period of 4 years. Garling J (at [65]) observed that rolled up charges include more than one episode of criminal conduct such that the criminality involved is greater than a charge involving only one episode of such conduct. Garling J (at [105]-[108]) identified two advantages to the offender in the use of rolled up charges. First, restriction of the maximum sentence available and, second, the fact that the sentence imposed represents a complete concurrence of separate sentences which might otherwise have been imposed.

69. The observations of Garling J were approved by this Court in R v De Leeuw [2015] NSWCCA 183. That case involved three counts of using a carriage service to access child pornography (a Federal offence) and one count of possessing child abuse material (a State offence) involving a multiplicity of pornographic images. Two further offences were also taken into account on a Form 1. Johnson J made the following remarks (at [116]):

“[116]   The use of ‘rolled up’ charges is very common with offences of this type. The sheer number of items, often seen in cases such as this, renders it both practical and sensible to proceed in this way. The sentence or sentences to be imposed for particular offences will reflect the number of images caught by the charge or the length of the period over which accessing has occurred. The larger the number of images, the more serious the offence will be. This is especially so where the number of images is to be measured (as in this case) in the tens-of-thousands. In this way, the charges include more than one episode of criminal conduct which will magnify the objective gravity of the offence: R v Richard at [65](f). Depending upon the circumstances of the case, this may have a bearing, as well, on the issues of accumulation and concurrency.

See also R v Glynatsis (2013) 230 A Crim R 99; [2013] NSWCCA 131 at [66]; R v Donald [2013] NSWCCA 238 at [85].

70. The applicant’s submissions principally focused on the head sentence (pre-discount for the guilty plea) of 8 years and 8 months compared with the maximum sentence of 10 years for the offence, submitting that a sentence of that nature was reserved for the worst class of cases. However that does not take into account the fact that this was a “rolled up count” involving a considerable number of transactions over a period of some years. The offences involved the systematic defrauding of the applicant’s employer in circumstances where he was in a position of trust. It has been repeatedly emphasised that in these circumstances general deterrence is of considerable importance: See R v Hawker supra at [23]-[24]; R v Woodman supra at [24]-[28] and the cases therein cited. It is of course necessary to consider the subjective circumstances of the offender. As I indicated I do not consider the fact that the theft took place to feed a gambling addiction to be a mitigating circumstance. Further I do not consider that the prior good character of the applicant in this case is a matter of great significance. It is generally only persons of good character who are placed in positions of trust so as to enable offences such as the present to be committed.

71. So far as restitution and remorse are concerned, they are plainly matters which need to be taken into account. However when dealing with restitution it must be remembered that of the total amount defrauded, only some $250,000 was repaid in return for a release from further liability. However, it is correct that the offender was remorseful for his conduct.

72. As the sentencing judge found, the applicant since his arrest has actively pursued courses towards rehabilitation and is well down that path. As the sentencing judge found, there was a low risk of reoffending. It is also correct that imprisonment will undoubtedly cause considerable hardship both to the applicant and to his family.

73. In considering the question of manifest excess it is also relevant in my opinion that the sentencing judge found special circumstances and adjusted the non-parole period to approximately 61% of the head sentence.

74. Taking all these factors into account, it seems to me the sentence which on its face appears severe when compared with the maximum penalty, was not in the particular circumstances of the present case unreasonable or plainly unjust. This ground has not been made out.

Conclusion

75. Having regard to the way the case was argued it seems to me that the appropriate course is to grant the applicant an extension of time within which to seek leave to appeal, grant leave to appeal but dismiss the appeal. Accordingly, I would make the following orders:

1. Grant the applicant an extension of time to apply for leave to appeal against the sentence imposed on him.

2. Grant the applicant leave to appeal.

3. Dismiss the appeal.

76. JOHNSON J: I agree with the Chief Justice.

77. FAGAN J: I agree with the Chief Justice.

**********

Decision last updated: 27 March 2017