Kong v Commissioner for Corporate Affairs - [2014] SASC 197

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Criminal)
KONG v COMMISSIONER FOR CORPORATE AFFAIRS
[2014] SASC 197
Judgment of The Honourable Justice Sulan
17 December 2014
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT - GROUNDS - GENERALLY
CRIMINAL LAW - PARTICULAR OFFENCES - PROPERTY OFFENCES - OTHER FRAUDS AND IMPOSITIONS - OTHER OFFENCES
CRIMINAL LAW - SENTENCE - RELEVANT FACTORS - RESPONSE TO CHARGES - RESTITUTION OR REPARATION
CRIMINAL LAW - SENTENCE - RELEVANT FACTORS - HARDSHIP - TO OFFENDER
Appeal against sentence. Appellant pleaded guilty to six counts of making improper use of a position in an incorporated association, pursuant to s 39A(3) of the Associations Incorporation Act 1985 (SA). He was sentenced to a total of 20 months’ imprisonment with a non-parole period of six months. Whether Magistrate erred in concluding that restitution made by the appellant did not evince contrition or remorse. Whether fresh evidence demonstrates that the appellant will serve his sentence of imprisonment more severely than a person without such a condition.
Held (allowing the appeal):
1. The Magistrate erred in concluding that the restitution made by the appellant evinced no contrition or remorse.
2. When the Magistrate came to consider whether good reason existed to suspend the sentence of imprisonment, she failed to have regard to the restitution made by the appellant.
3. The fresh evidence should, in the interests of justice, be considered on appeal. It sheds new light on the defendant’s mental condition which existed at the time of sentence and establishes that imprisonment will have a significant adverse effect on the appellant’s mental health.
4. Sentence set aside and appellant re-sentenced.
Associations Incorporations Act 1985 (SA) s 39A(3); Criminal Law (Sentencing) Act 1988 (SA) s 10(1)(g), referred to.
R v Bandjak [2011] SASCFC 19; Warner v Police [2014] SASC 54; Re Tran; ex parte A-G (2002) 128 A Crim R 1; R v Robertson (1984) 115 LSJS 51; R v Chaloner (1990) 49 A Crim R 370; Matulich v Police (2007) 252 LSJS 219; Bright v Police [2008] SASC 220; R v Jennings (1996) 187 LSJS 222; R v Wirth (1976) 14 SASR 291, considered.

KONG v COMMISSIONER FOR CORPORATE AFFAIRS
[2014] SASC 197
Magistrates Appeal: Criminal

SULAN J: This is an appeal against sentence. The defendant and appellant, Seng Chaing Kong, pleaded guilty to six counts of making improper use of a position in an incorporated association, pursuant to s 39A(3) of the Associations Incorporation Act 1985 (SA). The maximum penalty for each offence is a fine of $20,000 or imprisonment for four years. He was sentenced to a total of 20 months’ imprisonment with a non-parole period of six months.
The defendant appeals on the ground that the Magistrate erred in the manner in which she dealt with the restitution made by the defendant. It is further contended that fresh evidence demonstrates that the defendant will serve his sentence of imprisonment more severely than a person without such a condition.
Background
In 1991, the defendant commenced work with the Cambodian Association of South Australia (the “Association”) as a youth worker. In 1998, he was elected president of the Association, a position which he held for approximately nine years. The Association was incorporated in South Australia in March 1983. It was formed with the object of providing welfare services to members of the Cambodian community, maintaining a Cambodian culture and representing and advocating on behalf of the Cambodian community in South Australia.
During the period of the defendant’s presidency, the Association was dependent upon Government funding. The funds it received were used to employ social workers and to assist Cambodian refugees to integrate into the Australian community.
The Association initially operated out of premises at the Parks Community Centre in Angle Park. In June 2002, the Association purchased property at 172-174 Burton Road, Paralowie. That property was comprised of two adjacent titles. The operation of the Association was transferred to those premises. The property was purchased with the assistance of a loan from the ANZ Bank (“the ANZ loan account”), secured by mortgage over the two titles. The loan repayments to the ANZ Bank were funded by using Government grants to the Association.
During the period of the defendant’s presidency, the Association was the subject of Federal and State Government audits in relation to governance issues and the financial mismanagement of grant monies. In 2005, the defendant, and other members of the Association, were required to attend training sessions which included the topics of accountability and transparency.
In early 2007, the defendant announced his intention to resign from the position of president. A new committee was elected. They were informed that there was a considerable taxation liability to the Australian Tax Office. The newly elected committed was unable to obtain financial records from the defendant. The Public Officer for the Association, Mr Frank Althuizen, and Mr Redden, an accountant, met with representatives of both the old and new committees on a number of occasions in an attempt to resolve disputes between the two committees relating to the financial records which had not been provided to the new committee. In the circumstances, the defendant agreed to resume the role of president, as no other person was prepared to take on the responsibility.
By September 2007, the Association had liabilities of $118,183 to the Australian Tax Office on account of its PAYG obligations and outstanding fines. An amount of $234,000 was owing to the ANZ Bank in respect to the loan for the Burton Road property. Staff was owed $55,000 in entitlements. There were other outstanding amounts which left a total debt of approximately $460,000.
In order to meet its liabilities, the Association sold the larger of the Burton Road properties for approximately $330,000. Part of the proceeds of the sale were used to clear the debt to the ATO. However, before the mortgage on the remaining Burton Road property was discharged, the defendant reversed the loan such that the Association re-borrowed $140,000 from the ANZ Bank. The defendant’s explanation to the committee for doing so was to provide funds for building accommodation on the remaining block of land.
On 12 November 2008, the defendant, through a company of which he was the sole director, purchased a fruit and vegetable business for $290,000. Two days earlier, on 10 November 2008, the defendant drew a cheque made payable to himself for $40,000 from the funds which he had arranged for the Association to re-borrow from the ANZ Bank. Again, on 27 November 2008, the defendant drew a cheque for $95,000 from the same loan monies and deposited that amount into his personal account. These two transactions were the subject of counts 1 and 2.
On 14 January 2009, the defendant finalised the purchase of the fruit and vegetable business and paid over an amount of $135,000. Between June 2009 and October 2011, the defendant made personal repayments on the ANZ loan account totalling approximately $125,000. However, on four separate occasions the defendant withdrew monies from various bank accounts of the Association to make repayments on the ANZ loan account. On 14 November 2008, the defendant signed a cheque for $3,500, drawn from the Associations’ Commonwealth Bank account, which monies were deposited into the ANZ loan account. On 29 January 2009, the defendant signed a cheque for $3,000, drawn from the Association’s Commonwealth Bank account, which he deposited into ANZ loan account. On 4 March 2009, the defendant signed a cheque for $3,000, drawn on the Association’s Commonwealth Bank account and deposited that amount into the ANZ loan account. On 11 May 2010, the defendant withdrew the outstanding credit balance of $14,430.01 from the Association’s ANZ Bank business and cash account. The account was closed and the monies were deposited into the ANZ loan account. These four transactions were the subject of counts 3 to 6.
In about September 2009, Mr Redden was engaged to prepare the Association’s financial records for the period 1 July 2008 to 31 December 2009. Mr Redden identified the substantial bank debt, but was unable to find Board minutes authorising the borrowings from the ANZ Bank, nor was he able to obtain information from the defendant, despite his attempts to do so, about the financial affairs of the Association.
As a result of making enquiries of the bank, Mr Redden discovered that the amount of $135,000, the subject of the first two counts, were monies that had been paid to the defendant. He informed Mr Althuizen, who then met with the defendant and was advised by the defendant that he would pay back the monies. The ANZ loan was paid out on 21 October 2011, around two years later.
On 7 February 2014, an Information was laid in the Adelaide Magistrates Court charging the defendant with the offending. He entered guilty pleas to the charges on 2 May 2014. On 20 June 2014, the defendant made a payment to the Association in the amount of $33,010 which represented the monies he had drawn from the other Association accounts to service the loan account (counts 3-6). On 24 June 2014, the defendant paid a further $7,000 to the Association on account of its legal costs in bringing a civil action against the defendant to recover the monies subjects to counts 3 to 6.
Sentencing remarks
The Magistrate noted that the defendant was 49 years of age at the time of sentence and had no prior convictions. The Magistrate referred to a character reference from the Chief Abbot of the Wat Khmer Santipheap Association of South Australia, which described the defendant as a well-known member of the community who has done volunteer work for many years and who has never caused any dispute in the Cambodian community. He is described as a well-respected member of the community who has made a contribution to it. The defendant and his wife have two young children, as well as adult children. The Magistrate did not accept that there were no other options available to the defendant in respect of his running of his business and providing financially for his family if he was not available to carry on the business. She concluded that there were resources within the family which might be used to assist the family if the defendant was imprisoned.
The Magistrate observed that the offending occurred over a substantial period of time and that the defendant had used the misappropriated funds to purchase a business, which he still controlled and which was successful and making profits. The Magistrate referred to the restitution made by the defendant as follows:
The offending has been of significant benefit to you. This is one of the elements of the offence; that there has been a pecuniary gain or benefit and in this case there is no doubt that has occurred. The offending has assured that you were able to purchase a business which is now a profitable ongoing business, which is an asset to you and which can be sold if you choose to sell it as an asset. You have got equity in that business now because of the offending. That business remains an asset and you have not thought to sell it as I understand it, to repay monies to the Association. After a lengthy and protracted series of events including a civil court case which I know nothing about, the monies have now been repaid and including prior to the finalisation of the plea this week. The monies have been paid back by your adult children on your behalf. I do not know what the financial arrangement is between you and your adult children, whether or not it is an enforceable loan or whether it is perceived as a loan or some other form of payment. I have absolutely no idea about that. I do know the Association has now recovered its money including some interest and that is something that is obviously of significant relevance in these proceedings. That has of course taken a long time for that recovery to occur, but I do note it has now occurred.
…I have already remarked that restitution has been made with some interest payments and that is a relevant sentencing factor and one which must be given weight in the sentencing process.
Given the history of your interactions with the officials and the authorised persons in seeking to unravel the finances of the Association and your actions in delaying the uncovering of your unlawful behaviour, I do not find that this payment is evidence of your contrition.
The Magistrate described the defendant’s offending as “a sophisticated series of actions which occurred by [the defendant] improperly using [his] position as an officer of the incorporated association to gain a significantly pecuniary benefit.”
The defendant was sentenced to a total of 20 months’ imprisonment with a non-parole period of six months. The sentences imposed in respect of each count were as follows:
·    On count 1, imprisonment for six months, to commence on the day of sentence.
·    On count 2, he was imprisoned for six months, to be served cumulatively on count 1.
·    On each of counts 3, 4 5 and 6, he was imprisoned for two months on each count, each of those sentences to be cumulative upon each other and upon the sentence that was imposed on counts 1 and 2.
The Magistrate indicated that she had given credit for the defendant’s pleas of guilty of one-third discount, which was to be applied when arriving at the penalty for each count. The Magistrate considered that in the circumstances of the case, there was no good reason to suspend the sentence of imprisonment. She remarked:
The final question is whether or not there is good reasons to suspend that sentence of imprisonment. I do not find there is good reason to suspend that period of imprisonment. I will be ordering that that be served from today. I had considered the personal circumstances, the ones which Mr Guthrie urged me [sic] find good reason, but I do not regard in the circumstances of the case that there is good reason to suspend the sentence of imprisonment.
Restitution
The defendant submits that the Magistrate erred in failing to account for the restitution made by the defendant as evidence of his contrition and remorse or of his good prospects of rehabilitation. It is contended that the failure to do so resulted in the Magistrate failing to find good reason existed to suspend the sentence of imprisonment.
The Criminal Law (Sentencing) Act 1988 (SA) provides that in determining the sentence for an offence, a court must have regard to “the degree to which the defendant has shown contrition for the offence (including by taking action to make reparation for any injury, loss or damage resulting from the offence)”.[1] In R v Bandjak, White J distilled the relevant principles to be considered where a defendant has made restitution. His Honour observed: [2]
[1] Criminal Law (Sentencing) Act 1988 (SA) s 10(1)(g)
[2] [2011] SASCFC 19 at [80].
The significance to be attached to actual steps taken by a defendant to make reparation, and to offers to take such steps, have been discussed in several authorities (both before and after the enactment in 1988 of the Sentencing Act). The relevant principles can be summarised as follows:
1.The making of restitution is always a relevant matter (R v Wirth) and is mitigatory. This Court in R v Robertson spoke of the significance of restitution in the following passage:
[Full restitution] is a very important fact from more than one point of view. It means that the persons who have suffered loss as a result of the crimes will be restored to the position in which they were before they lost their money and will have suffered only to the extent of any inconvenience and emotional upset which was caused to them and any interest which they might lose as a result of not having the use of the money.
2.It is the consistent policy of Courts to encourage the making of restitution: R v Afford; SA Police v John.
3.Apart from providing some reparation to the victim, and being an indication of contrition, restitution out of the defendant’s own resources also means that he or she has not profited from the crime: R v Afford.
4.The making of restitution will usually be evidence of remorse: R v Wirth. In particular, a defendant’s willingness to work long hours and to assume heavy burdens in order to make reparation will usually be good evidence of remorse: R v Wirth.
5.There are limits on the extent to which leniency should be granted when a defendant’s family or friends assist in making the restitution because, in such circumstances, there may simply be a shift of the burden of the crime from the original victim to persons other than the defendant: R v Jennings; R v Wirth.
6.However, the fact that others are willing to supply the funds used in making restitution does not mean that the reparation is of no significance in the sentencing. The making good of the victim’s loss is an important factor and the fact that others are prepared to do this may speak in favour of the defendant’s intrinsic worth: R v Wirth; SA Police v John.
7.Courts should be alert not to permit defendants in effect to buy, or appear to buy, suspension of a term of imprisonment by making, or by offering to make, reparation for their offence: Cox v Betts; Kovacevic v Mills. In R v Allen McMurdo P spoke of this consideration saying:
Whilst courts would never allow wealthy offenders with the capacity to pay compensation to buy their way out of an appropriate custodial sentence, restitution is, as the respondent concedes, a relevant mitigating factor in that it compensates the victim and benefits society and is often, as here, a tangible demonstration of genuine remorse.
8.Courts view offers made for the first time during the course of sentencing submissions to make restitution with some circumspection. Stanley J (with whom Wanstall and Stable JJ agreed) in the Queensland case of R v O’Keefe said:
It would be of the worst example if any sentence induced or tended to induce a belief that offenders would escape punishment if, when convicted, they made or offered to make restitution. Offenders cannot bargain with the court, and, in effect buy themselves out of sentences.
Nevertheless, as the decision in O’Keefe itself shows, if the Court is satisfied about the genuineness of the offered restitution it may be a very relevant consideration in the sentencing.
9.In an appropriate case it may be appropriate for a court to defer sentencing so as to permit a defendant to make good an offer made in the course of the sentencing submissions by paying into court the amounts necessary to make proper restitution. The circumstances (described by Debelle J as “unusual circumstances”) in Radjevic v Police provide an example.
[Citations omitted.]
In the recent decision of Warner v Police,[3] Nicholson J referred to the conflict that can arise where restitution has been made. His Honour observed:[4]
A tension can often arise in this context between the notion that a person should not be able to buy their way out of what is a just and appropriate punishment for their illegal conduct and the notion that the making of restitution should be regarded as mitigatory for the reasons just summarised. Not everyone will be able to make restitution. Once funds have been stolen and dissipated (as usually happens) the capacity to make restitution will depend upon each offender’s personal circumstances. Care needs to be taken not to allow excessive credit for an act of restitution in the (probably unusual) case where a person is in a financial position to do so without having to suffer substantial financial or other personal detriment. It has been said that wealthy offenders should not be allowed to buy themselves out of a custodial sentence.[5] Nevertheless, this situation is likely to arise rarely and the cases consistently confirm the proposition that actual full restitution in fraud cases is an important factor in sentencing.[6]
[3] [2014] SASC 54.
[4]    Warner v Police [2014] SASC 54, [32].
[5]    Re Tran; ex parte A-G (2002) 128 A Crim R 1; [2002] QCA 21.
[6]    R v Bandjak [2011] SASCFC 19; R v Robertson (1984) 115 LSJS 51; R v Chaloner (1990) 49 A Crim R 370; Matulich v Police (2007) 252 LSJS 219, [2007] SASC 440; Bright v Police [2008] SASC 220.

Later in his reasons, Nicholson J made the following observations which are pertinent to the present appeal:[7]
Nevertheless, there can be no doubt that, from the beginning, the appellant would have expected to receive a custodial sentence; the burden of submissions by way of mitigation put on her behalf was always to the effect that suspension of the inevitable term of imprisonment could be justified. In these circumstances, it is of concern that the failure to suspend in this case and the failure by the Magistrate to explain why the making of restitution of such a substantial amount was not, in the circumstances, sufficient to permit suspension, might act as a significant disincentive to other offenders faced with the decision of whether or not to make restitution. I recognise that the primary victim in this matter, the employer, would be anxious, as a good corporate citizen, to see that the appellant is properly punished for her offending. However, I also have little doubt of the importance to a victim in these circumstances of a sentencing regime that encourages full restitution of monies stolen or defrauded.
There is another factor that in my view should be taken into account. It is true that there are limits to the extent to which leniency can be granted when a defendant’s family or friends assist with making restitution for the reason that “there may simply be a shift of the burden of the crime from the original victim to persons other than the defendant”.[8] I will refer to this matter again when I deal (below) with the position of the appellant’s husband. However, I do not accept that there has been such a shifting of the burden of the crime away from the appellant in this case.
[Emphasis is mine.]
[7] Warner v Police [2014] SASC 54, [36]-[37].
[8] R v Jennings (1996) 187 LSJS 222 at 226; R v Wirth (1976) 14 SASR 291 at 295 and R v Bandjak [2011] SASCFC 19 at [80] (White J).
The offending in the present case was serious. It was aggravated by a number of circumstances including that the defendant had previously been warned about the financial mismanagement of the Association, it involved a breach of trust and an abuse of a position of authority and the defendant delayed efforts to uncover the offending by failing to cooperate with those investigating the financial affairs of the Association. It called for the imposition of a custodial sentence.
As at the date of sentence, the defendant had made full restitution to the Association, which included interest and costs. By October 2011, before the defendant was charged with the offending, he had personally repaid approximately $125,000 to the Association. He was assisted by his sons in making the final payments to the Association on 20 and 24 June 2014.
Whilst it is accepted that the defendant’s conduct in delaying the investigation into the financial affairs of the Association could properly be regarded as reducing the mitigatory effect of the restitution made by the defendant, I consider that the Magistrate erred in concluding that the restitution evinced no contrition or remorse. In my view, the Magistrate fell into error by placing too much emphasis on the fact that the defendant had not sold the business and that his adult sons assisted him in making restitution. The Magistrate’s finding that the restitution evinced no contrition would more readily apply in circumstances where no restitution had been made and a defendant continued to enjoy the benefits of his or her offending.
That the defendant was assisted by his sons with making restitution does not ameliorate its mitigatory effect. This was not a situation in which the defendant attempted to buy his way out of a just and appropriate punishment. The defendant is the sole provider for his family deriving income through his business. All income is applied to his family and business expenses. I am informed that the defendant and his family as a whole have made sacrifice in making restitution. I consider that there has not been a complete shifting of the burden of the crime away from the defendant in this case.
A question arises in cases such as the present, where a defendant applies misappropriated funds to a particular venture and, through his or her labours, is able to benefit from the venture. I consider that a defendant in such a case who is then able to make restitution without having to forgo the venture should not be regarded in any different light to a defendant who applies misappropriated funds in a manner in which they cannot be recovered and who makes restitution by borrowing monies from another or having to sell his or her assets. It is accepted that restitution out of the defendant’s own resources usually means that he or she has not profited from the crime. However, in the present case, the defendant made significant reparation long before charges were laid by, what I must assume, was his willingness to work long hours and assume heavy burdens. In my view, he should not be deprived of the mitigatory effect of the restitution he made because has not sold the business.
For these reasons, I am of the view that the Magistrate erred in finding that the restitution made by the defendant was not evidence of contrition or of the defendant’s good prospects for rehabilitation. Accordingly, when the Magistrate came to consider the question of whether good reason existed to suspend the sentence of imprisonment, she failed to have regard to these relevant factors.[9]
[9] House v The King (1936) 55 CLR 499.
I turn to consider the new evidence regarding the defendant’s mental state.
Defendant’s mental state
An affidavit sworn by the solicitor who appeared before the Magistrate, Mr Guthrie, states that during sentencing submissions he informed the Magistrate:
·    the defendant was born in Cambodia in 1964;
·    he resided in Cambodia while the Khmer Rouge was in power from 1975 to 1979;
·    he fled Cambodia with his family in 1979; and
·    he was in a refugee camp in Thailand for four year after leaving Cambodia, before settling in Australia.
The defendant spent six days in custody between the date he was sentenced and the date he was released on bail pending the outcome of this appeal. The defendant now seeks to adduce evidence of a psychiatrist, Dr Jules Begg, in relation to the defendant’s mental condition following the time he has spent in custody.
In a report dated 20 August 2014, Dr Begg opines that the defendant suffers from Post-Traumatic Stress Disorder (“PTSD”) caused by his childhood experiences in Cambodia. Counsel for the defendant contends that although the PTSD existed at the time of sentence, the memories giving rise to the condition have been reactivated and exacerbated by the time spent by the defendant in prison.
Counsel for the defendant submits that the psychiatric report is relevant to establishing the defendant’s psychiatric condition which existed at the time of sentence; to demonstrate the impact of an immediate custodial sentence on the appellant’s psychiatric condition; and to establish that the defendant will serve his time in prison more harshly that a person without such a condition.
Counsel for the respondent does not object to me receiving the report of Dr Begg. Section 42(4) of the Magistrates Court Act 1935 (SA) provides that “on an appeal, the appellate court may, if the interests of justice so require, re-hear any witnesses or receive fresh evidence”. The principles applicable to the receipt of fresh evidence on appeal under the provision of the Criminal Law Consolidation Act 1935 (SA) do not apply to appeals in this jurisdiction.[10]
[10] R v O’Shea (1982) 31 SASR 129; R v Doring (1981) 27 SASR 481; Sullivan v Police [2010] SASC 216
In R v Hallett,[11] Gray J set out the principles applicable to the receipt of further evidence on an appeal against sentence. Whilst that discussion was referrable to the powers of the Full Court, the observations are nonetheless relevant. His Honour said:[12]
[11] [2012] SASCFC 143.
[12] R v Hallett [2012] SASCFC 143, [33]-[36].
It is against this background that it is convenient to turn to the approach taken by this Court to the reception of further evidence on sentence appeals. In McIntee, King CJ discussed the purpose of further evidence:[13]
[13] R v McIntee (1985) 38 SASR 432, 435.
The rules relating to fresh evidence, like all rules of law, should be applied so as to serve and not to frustrate the interests of justice. I have no doubt that appellate courts will always receive fresh evidence if it can be clearly shown that failure to receive such evidence might have the result that an unjust conviction or an unjust sentence is permitted to stand. …
In Smith, King CJ further observed:[14]
[14] R v Smith (1987) 44 SASR 587, 588.
… The proper purpose of fresh evidence on an appeal against sentence is to bring before the court facts which were in existence at the time of the imposition of sentence but were not known to the sentencing judge or to explain facts which were before the sentencing judge so as to put them in a new light. …
The following rules of practice have been developed in several authorities of this Court:
·    The power to receive further evidence on appeal should be exercised with caution bearing in mind that that power exists to serve the interests of justice.
·    The purpose of receiving further evidence on appeal is to shed new light on facts which were before the sentencing Judge or to inform the appeal court of facts which were in existence at the time that the sentence was imposed but were unknown to the sentencing Judge.
·    An adequate explanation for the failure to bring those facts to the sentencing Judge’s attention should be provided.
·    The court should be satisfied that the evidence could not have been obtained with reasonable diligence for use at the trial.
·    The evidence should be such that it would probably have an important influence on the result of the case. However, it need not be decisive.
·    The court should not receive further evidence about events which occurred after the imposition of sentence except where such further evidence shows the true significance of facts which were in existence at the time of sentencing.
All of the above rules of practice are subservient to the overriding principle that evidence will be received on appeal if a failure to do so would result in an unjust sentence having been imposed.
I am satisfied that it is in the interests of justice to receive the report of Dr Begg. The evidence sheds new light on the defendant’s mental condition which existed at the time of sentence, although the condition was significantly exacerbated by the short period of time in which the defendant spent in custody. It is a relevant factor to be taken into account in sentencing the defendant.
In his report, Dr Begg outlines the defendant’s mental condition and the effect of imprisonment on the defendant. He states:
From a psychiatric perspective, it is clear that Mr Kong was significantly traumatised as a child. On at least three occasions he was exposed to life-threatening incidents. There was also a prolonged period of poor food intake and during the Khmer Rouge period, although he did not describe fears, the history of Cambodia at that time suggests significant fear was present in the population. That his family went to the Thailand refugee camp implies a significant level of fear was present. Consequently, it is evident that Mr Kong’s development has been adversely impacted by episodic and chronic trauma exposure. When Mr Kong came to Australia, he had the support of his family, was industrious in his education and thereafter has worked industriously in business. He has striven to be a model citizen and parent…
What is abundantly clear is that his exposure to the prison environment has reactivated the repressed traumatic memories of his childhood. The aggression portrayed by prisoners has reactivated his own memories of aggression as a child. That he could not eat the prison food and lost a significant amount of weight is due to both reactivation of the childhood memories of food starvation but also a metaphor for his inability to “swallow the hostility” of the prison environment. Typical of posttraumatic stress disorder, there is hyper arousal of the nervous system. Consequently his sleep is restless, he sweats excessively and he has excessive dreams…Put simply, he is overstimulated and is seeking quiet solitude as any further stimulation, even normal behaviours such as interacting with family members, he now finds overwhelming. This, however, leads to a depressive reaction as there is an absence of exposure to normal life experiences that give life pleasure and meaning. Although treatment of Mr Kong will encourage him to participate further in life activities, such is unlikely to be successful until the hyper arousal of the PTSD is reduced.
Dr Begg concludes his report by observing:
I believe that Mr Kong’s condition will deteriorate with a custodial sentence. The longer he is unwell, the more difficult it will be to regain wellness. I would estimate that if Mr Kong serves a six-month non-parole period, on release it will take two years for recovery of the PTSD and depression to occur with intensive treatment. Imprisonment will have been experienced as a continual stressor. Whilst I have taken into account that Mr Kong has some premorbid resilience as demonstrated by his successful family life and business in Australia, the prolonged stressor of imprisonment will nevertheless lead to a persistence of a mixture of posttraumatic stress disorder and depression. People with such disorders that arise from prolonged exposure to stress often remain unwell for years without treatment and intervention, the depression usually recovers after 12 months and then the remaining PTSD symptoms, predominantly intrusions and anxiety, reduce over the following 12 months. In total, about two years for recovery to occur.
In Smith, King CJ considered the role of a defendant’s ill health in the sentencing process. In my view, the observations apply equally in respect of a defendant’s mental health. The Chief Justice said: [15]
The state of health of an offender is always relevant to the consideration of the appropriate sentence for the offender. The courts, however, must be cautious as to the influence which they allow this factor to have upon the sentencing process. Ill health cannot be allowed to become a licence to commit crime, nor can offenders generally expect to escape punishment because of the condition of their health. It is the responsibility of the Correctional Services authorities to provide appropriate care and treatment for sick prisoners. Generally speaking ill health will be a factor tending to mitigate punishment only when it appears that imprisonment will be a greater burden on the offender by reason of his state of health or when there is a serious risk of imprisonment having a gravely adverse effect on the offender’s health.
[15] (1986-1987) 44 SASR 587, 589.
In my view, the report of Dr Begg establishes that imprisonment will have a significant adverse effect on the defendant’s mental health. I am satisfied that had the report been available to the Magistrate, good reason would have been found to suspend the sentence.
Conclusion
For these reasons, I would set aside the sentence imposed by the Magistrate. In re-sentencing the defendant I see no reason to depart from the sentence imposed by the Magistrate. I would impose a total head sentence of 20 months’ imprisonment with a non-parole period of six months. The sentence and non-parole period are to commence from today. I am satisfied that good reason exists to suspend the sentence. Accordingly, I would suspend the sentence of imprisonment upon the defendant entering into a bond to be of good behaviour for a period of two years and to be under the supervision of a Community Correction Officer for a period of 12 months and obey the lawful directions of that officer.