Kovacevic v The Queen
[2021] VSCA 49
•11 March 2021
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S EAPCR 2020 0256
| NATASHA KOVACEVIC | Applicant |
| v | |
| THE QUEEN | Respondent |
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| JUDGES: | KAYE JA | |
| WHERE HELD: | MELBOURNE | |
| DATE OF HEARING: | 9 March 2021 | |
| DATE OF JUDGMENT: | 11 March 2021 | Second Revision: 22 March 2021 |
| MEDIUM NEUTRAL CITATION: | [2021] VSCA 49 | |
| JUDGMENT APPEALED FROM: | DPP v Kovacevic (Unreported, County Court of Victoria, Judge Dean, 29 June 2020) | |
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APPLICATION FOR LEAVE TO APPEAL AGAINST SENTENCE DETERMINED BY A SINGLE JUDGE PURSUANT TO S 315 OF THE CRIMINAL PROCEDURE ACT 2009
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CRIMINAL LAW – Application for leave to appeal – Sentence – Applicant pleaded guilty to five charges of obtaining financial advantage by deception – Applicant misappropriated $631,697.84 from employer through 126 fraudulent transactions conducted over four years – Sentenced to 12 months’ imprisonment with 2 year community corrections order – Applicant’s two year old son living in prison with her – Whether sentence manifestly excessive – Whether judge should have ordered wholly non-custodial sentence – Leave to appeal refused – Markovic v The Queen (2010) 30 VR 589.
CRIMINAL LAW – Appeal – Procedure – Application for extension of time to file application for leave to appeal against sentence – Ground of appeal not reasonably arguable – Exceptional circumstances – Family hardship – Extension of time granted.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Ms F Gerry QC with Ms J Kretzenbacher | C. Marshall & Associates |
| For the Respondent | Mr J McWilliams | Ms A Hogan, Solicitor for Public Prosecutions |
KAYE JA:
The applicant pleaded guilty, in the County Court, to five charges of obtaining a financial advantage by deception. On 29 June 2020, she was sentenced, on those charges, to an aggregate term of 12 months’ imprisonment together with a community corrections order for a period of 2 years, that order to commence on the completion of the term of imprisonment.
On 11 December 2020, the applicant filed an application for leave to appeal against sentence on the ground that it is manifestly excessive. The applicant was required, by ss 275 and 279 of the Criminal Procedure Act 2009, to commence that application within 28 days of sentence. The substantive application for leave to appeal against sentence was thus commenced almost five months out of time. Accordingly, the applicant has also made application for an extension of time within which to seek leave to apply for leave to appeal against sentence.
It is appropriate, first, to deal with the application for an extension of time. The principles that apply to such an application were discussed by the High Court in Kentwell v The Queen.[1] For present purposes, they were sufficiently summarised in the following passage from the judgment of this Court in Barber v The Queen:[2]
The principles, that apply to an application for an extension of time, have been stated in a number of decisions of this Court. The applicant bears the burden of persuading the Court that an extension of time should be granted in his or her favour. The Court has a wide discretion in determining whether to grant an extension of time. However, the central consideration is whether it is in the interests of justice that the application for leave to appeal be heard, notwithstanding that it has been brought outside the prescribed time. In determining that question, a number of factors are ordinarily taken into account, including the length of the delay and the reasons for it. In addition, the prospects of success of the proposed application for leave to appeal against sentence, should the extension be granted, are material. Each of those factors, and any other relevant circumstances, are taken into account in a balanced exercise of the discretion. Ordinarily, where the delay is considerable, the Court will not grant the extension, unless it is satisfied the proposed grounds are sufficiently meritorious to justify the grant of the extension notwithstanding such delay.[3]
[1](2014) 252 CLR 601, 613–14 [30]–[32]; [2014] HCA 37 (French CJ, Hayne, Bell and Keane JJ).
[2][2018] VSCA 232.
[3]Ibid [3] (Kyrou and Kaye JJA) (citations omitted).
The explanation for the delay is contained in the application for an extension of time, supported by two affidavits of the plaintiff’s solicitor, Mr Felix Ralph. During the week commencing 20 July 2020, the applicant received written advice from her former solicitors, which did not favour making an application for leave to appeal against sentence. The applicant wished to obtain a second opinion. Having ascertained the name of Mr Ralph, she was not able to contact his office until 27 August. Eventually she spoke with Mr Ralph on 3 September. He told her that it was unlikely that she would receive Legal Aid funding for the appeal and he outlined the estimated costs to her for an appeal. On 30 September, the applicant told Mr Ralph that she could not afford those fees. Subsequently, on 14 October, Mr Ralph informed the applicant that counsel were prepared to undertake the appeal for a drastically reduced fixed fee. He forwarded a costs agreement to her, and the applicant caused the amount of the fixed fee to be paid to Mr Ralph’s trust account on 19 October. In the application, the applicant stated that it had taken longer than anticipated for her to instruct a solicitor and counsel to prepare an appeal, because of the difficulties in contacting them due to the COVID-19 restrictions, and because of the time that it took to obtain funding for the appeal.
The delay in making the application is quite substantial. The applicant has proffered legitimate reasons that would account for some of the delay. In particular, it is understandable that, in the last six months of 2020, there may have been difficulties for the applicant to expeditiously speak with a solicitor, and to arrange funding for the appeal. I doubt that the reasons proffered by the applicant account for the whole period of the delay. As I shall discuss, I do not consider that the ground of appeal, that is proposed to be relied on, is reasonably arguable. However, there is one unusual circumstance in the case. Before she was sentenced, the applicant made a successful application to the Department of Justice and Community Safety under the ‘Living with Mum Program’, whereby her two-year old son would be permitted to reside with her in prison if she were sentenced to a term of imprisonment. In his reasons for sentence, the judge accepted that the fact that the applicant’s son would be in prison with her, and thus would spend an important stage of his life in the confined circumstances of a gaol, excluded from the company of wider family, was an exceptional circumstance of a kind described by the Court of Appeal in Markovic v The Queen.[4] In those circumstances, I consider that it is appropriate that an extension of time be given to the applicant, notwithstanding the view that I have reached that the application for leave to appeal against sentence should be refused.
[4](2010) 30 VR 589; [2010] VSCA 105 (‘Markovic’).
I turn, then, to the substantive application for leave to appeal against sentence.
Circumstances of offending
In mid-October 2012, the applicant, who was then 32 years of age, commenced employment as the Financial Controller of Clutch Industries Pty Ltd (‘Clutch Industries’), which was a company that traded out of Thomastown. In her role, the applicant was responsible for managing accounts payable and receivable, as well as profit and loss reporting. She was authorised to conduct electronic bank transfers on behalf of Clutch Industries in order to pay legitimate business expenses.
One of the largest customers of Clutch Industries was Repco. Clutch Industries maintained a warranty rebate ledger account for Repco, by which a percentage of sales made to Repco were set aside, by way of a journal entry in a separate ledger account, but not in a separate bank account. In that way, Clutch Industries provided a fund against which warranty claims could be made by Repco with the prior agreement of Clutch Industries.
The applicant resigned from the position at Clutch Industries and completed her last day there on 15 March 2017. Her annual remuneration package then totalled approximately $155,000. One month later, the principal director of the company, Mr Christopher Hatton, commenced to review the financial results from March of that year. In doing so, he detected an abnormality in the Repco warranty rebate ledger account, noting that there were two entries in the ledger. The standard practice of Clutch Industries was to aggregate individual warranty claims for a period into a single debit entry in the Repco warranty rebate ledger account. As a consequence, the Clutch Industries accountant, Pan Liu, contacted the applicant, who advised Ms Liu that the invoices were the result of an arrangement she had made with a contract manager at Repco, who had instructed her how to treat it in the books of Clutch Industries. Mr Hatton was not satisfied with that explanation and he decided to contact Repco. When he did so, he was advised that certain invoice numbers had not been generated by Repco, and that the bank account, into which the funds had been transferred, did not belong to Repco.
Mr Hatton then commenced a review of transactions from the Clutch Industries bank account. He identified that the first fraudulent payment occurred a few months after the applicant commenced her employment with Clutch Industries, and that the last fraudulent payments were made on the day on which the applicant resigned her position.
Further investigations undertaken by Clutch Industries revealed that multiple invoices, bearing logos of various customers of Clutch Industries, had been fraudulently created by the applicant, and that the transactions associated with those invoices had been paid into six different bank accounts. Five of those bank accounts were in the name of the applicant and the sixth account was registered in the name of the applicant’s mother. At the time, the applicant’s mother was incapacitated, and the applicant controlled that account on her mother’s behalf.
A senior forensic accountant from the Victoria Police Specialist Resources Unit conducted a forensic analysis of the six bank accounts. That analysis identified 126 fraudulent transactions between 18 February 2013 and 15 March 2017 constituting transfers from the bank account of Clutch Industries into the six bank accounts. The total value of the misappropriated funds was $631,697.84.
The five charges to which the applicant had pleaded guilty, were ‘rolled up charges’ representing the following offending:
Charge 1Thirty transactions between 18 February 2013 and 31 December 2013 totalling $94,433.56.
Charge 2Seventeen separate transactions between 2 January 2014 and 22 December 2014 totalling $230,100.26.
Charge 3Twenty-seven separate transactions between 15 January 2015 and 24 December 2015 totalling $139,618.81.
Charge 4Forty-three separate transactions between 15 January 2016 and 30 December 2016 totalling $141,640.74.
Charge 5Nine separate transactions between 16 January 2017 and 15 March 2017 totalling $25,904.47.
In the meantime, Clutch Industries commenced a civil proceeding in the Supreme Court against the applicant and her mother to recover the company’s losses. Clutch Industries recovered $250,000 of those losses pursuant to an insurance policy held by it. The civil proceeding resolved, and the applicant paid to it a further sum of $400,000 in settlement of those proceedings. That payment was funded by way of a bank loan secured by a mortgage over the house of the applicant’s mother.
Arrest
The applicant was arrested on 2 October 2018 and conveyed to the Northcote police station, where she participated in a record of interview. In the course of that interview, she made full admissions. She said that Clutch Industries had poor financial controls in place and that her offending had been motivated by her gambling addiction. She told police that during her time at Clutch Industries, she had developed a very big gambling habit. The applicant was charged on 2 October 2019 and bailed to appear at the Melbourne Magistrates’ Court on 8 October 2019 for the purposes of a filing hearing on that date. Subsequently, the applicant pleaded guilty at a committal mention.
The applicant has no previous or subsequent convictions and at the time of sentence there were no outstanding charges against her.
The plea
The applicant was born in 1980. She has two younger sisters and a younger brother. Her parents were of Serbian origin. The applicant attended an all girls Catholic high school where she suffered bullying because of the then war that was raging in former Yugoslavia. She completed her education at Kew High School, and then completed an Advanced Diploma in Business and a Bachelor of Business Accounting at the Royal Melbourne Institute of Technology. In 2008, she became a Certified Practising Accountant.
At the age of twenty years, the applicant commenced a relationship with a man with whom she became quite besotted. However, after a few years, it became evident that the relationship was, in her mother’s words, a ‘toxic, abusive, aggressive, manipulative, emotional, and psychological relationship’. At one point, the applicant became pregnant, and, under strong pressure from her partner, she terminated the pregnancy. In 2010, her partner introduced her to gambling, principally using poker machines. In her vulnerable state, the applicant soon became severely addicted to the habit. A forensic accountant calculated that between February 2013 and May 2017 a total sum of $866,980 was withdrawn in cash from automatic teller machines from accounts in the applicant’s name. In 2017, the applicant again became pregnant to her partner. He insisted that she again terminate that pregnancy. When she refused to do so, the relationship came to an end. The applicant gave birth to a son in March 2018.
Following her resignation from Clutch Industries, the applicant commenced employment for five weeks in 2018 with Vehicle Development Corporation. In 2019, she returned to conduct an audit of that company’s accounts, after the directors of the company had detected irregularities. As a result of the audit conducted by the applicant, it was revealed that a bookkeeper employed by that business had misappropriated moneys. The applicant has provided a witness statement to Victoria Police in relation to the audit. In the course of the plea, the applicant gave an undertaking to give evidence for the prosecution in criminal proceedings against the bookkeeper.
In May 2017, the applicant attended Banyule Community Health to obtain treatment for her gambling addiction. Between May 2017 and December 2017, and between November 2019 and June 2020, she attended a total of 37 sessions with Ms Violeta Stolevska, a specialist therapeutic counsellor. The applicant also attended the Salvation Army Gambling Counselling Service on 13 occasions. In addition, she executed self-exclusion orders, in relation to a number of gambling venues.
Ms Stolevska provided a report dated 12 June 2020, which was tendered on the plea. Ms Stolevska stated that the applicant had demonstrated that she had been able to manage high risk stress without relapsing to gambling or reoffending. She had ceased her difficult relationship with her boyfriend and repaired her relationship with her parents. Ms Stolevska considered that the applicant had shown remorse. She had responded well to and participated actively in the counselling process. Ms Stolevska considered that the applicant has a much clearer picture now of how she became involved to the extent that she did in gambling. She considered that the applicant was aware of the constructive steps she could take in the event of her being at risk of gambling again.
The applicant also attended Mr Nial Wotherspoon, a psychologist and occupational therapist, on nine occasions between 9 June and 22 September 2017. Mr Wotherspoon noted that the applicant had attended all appointments promptly and had expressed remorse for her behaviour, and seemed determined to make a new beginning. The applicant was increasingly more open and transparent with her life and the direction she was taking. She had embraced an intensive four-week meditation program during treatment and also underwent meditation practise.
The applicant was assessed by Mr Peter Hanley, a psychologist, on 12 November 2019 and 19 May 2020. His report was tendered on the plea. In assessing the applicant’s cognitive functioning, Mr Hanley considered that her thought pattern appeared to reflect emotional distress, limited insight, and the presence of cognitive distortions used to justify her offending. He considered that the applicant met the DSM-5 diagnostic criteria for Severe Gambling Disorder, Persistent, In Sustained Remission. While the applicant appeared to be managing her gambling behaviour and had several external supports in place, she continued to express gambling-enabling cognitive distortions related to money. Mr Hanley considered that the applicant overemphasised money as both a cause of, and solution to, her emotional and relational problems. Mr Hanley was of the view that the applicant could benefit from treatment aimed at addressing the cognitive distortions regarding money and dishonesty that may have contributed to, and/or resulted from, her gambling disorder.
Mr Hanley considered that the applicant’s personality traits were clearly maladaptive but not sufficiently inflexible and pervasive to warrant a diagnosis. Nevertheless, she exhibited prominent features of ‘cluster B’ personality disorder, which pointed to deficits in emotion regulation, behavioural control, empathy and the ability to maintain stable relationships. Mr Hanley considered that the applicant’s offending reflected a combination of maladaptive personality traits and a severe gambling disorder. While she had made good progress in addressing her gambling behaviour, there remained a need for offence specific treatment aimed at developing her insight in addressing her offending pattern. Her emotional symptoms were sufficiently severe to meet the DSM-5 diagnostic criteria for Adjustment Disorder with mixed disturbance of emotions and conduct, and the applicant required treatment to enhance her capacity to regulate her emotions and to control her behavioural impulses in the context of distress. He considered that if the applicant’s treatment sufficiently addressed her needs, it could be expected to reduce her risk of recidivism. Her most salient risk factors included her gambling disorder, poor insight and instability in emotions, relationships and behaviour. Mr Hanley also considered that the applicant’s emotional health would deteriorate if she was separated from her son.
On the plea, counsel for the applicant submitted that the applicant should not receive a sentence of imprisonment, but that she should be released on a community corrections order. In support of that submission, he relied on the following mitigating factors:
1. The applicant’s early plea of guilty.
2. Her admissions to the police.
3. The applicant had no previous convictions.
4.Apart from the offending, the applicant had been a person of good character. In that respect, a number of character references were tendered from members of her family and friends and associates, each of whom spoke highly of the applicant, and who expressed the view that her offending was entirely out of character.
5.The applicant had made reparation for the moneys that she had defrauded from Clutch Industries.
6.The applicant had undergone treatment and commenced her path to rehabilitation.
7.The applicant had undertaken to cooperate in the other case in which she was a witness for the prosecution.
8.There had been a period of three years’ delay between the detection of the applicant’s offending and her sentence.
9.If the applicant was sentenced to prison, that sentence would involve hardship to her two year old son which, it was submitted, was an exceptional circumstance and should be taken into account as a mitigating factor.
Reasons for sentence
In his reasons for sentence,[5] the judge observed that the applicant’s offending amounted to a gross breach of trust placed in her, and that it had had an adverse effect on the operation of the business of Clutch Industries. The judge noted that the applicant had engaged in planned and thorough criminal dishonesty over a period of four years, in breach of her professional duties as an accountant. Accordingly, his Honour characterised her moral culpability for the offending as high and noted that, in a case such as this, general deterrence is a significant sentencing consideration.[6] His Honour also observed that the applicant’s gambling addiction did not mitigate her offending, but it explained why she embarked on such systematic dishonesty.[7]
[5]DPP v Kovacevic (Unreported, County Court of Victoria, Judge Dean, 29 June 2020) (‘Reasons’).
[6]Ibid [13]–[14].
[7]Ibid [19].
In mitigation, the judge took into account that the applicant had no previous or subsequent convictions, that there were no outstanding charges against her, and that she was a person of hitherto good character.[8] The judge took into account that since the applicant’s offending, she had undertaken extensive counselling in relation to her gambling addiction, and that she had executed self-exclusion orders in relation to a number of gambling venues.[9] In that respect, the judge noted that Mr Hanley expressed the opinion that the applicant lacked insight into her offending, and that the applicant had a pervasive sense of entitlement that underpinned her personality.[10] The judge also considered that the undertaking, given by the applicant to cooperate in the prosecution of the bookkeeper of Vehicle Development Corporation, was a significant factor in her favour.[11]
[8]Ibid [3].
[9]Ibid [20].
[10]Ibid [25].
[11]Ibid [21].
The judge accepted that the entry of the applicant’s two year old into the prison system, to reside with her during the COVID-19 pandemic, constituted an exceptional circumstance of the kind referred to by the Court of Appeal in Markovic, and therefore it was appropriate to take into account, as a mitigating factor, the hardship that the applicant’s son would encounter by reason of the applicant’s imprisonment.[12] In addition, the COVID-19 restrictions increased the hardship of imprisonment for the applicant, as she would not be able to receive visits or engage in the usual prison programs.[13]
[12]Ibid [22]–[23].
[13]Ibid [24].
The judge noted the contents of the report by Mr Hanley, which detailed the applicant’s lack of insight into her offending and her pervasive sense of entitlement which underpinned her personality.[14] The judge also accepted that there had been a delay in the disposition of the charges against the applicant, and that the applicant had not reoffended during that time.[15]
[14]Ibid [25].
[15]Ibid [26].
The judge concluded that the case was a very serious example of the type of offending to which the applicant had pleaded guilty, and ordinarily a significant term of imprisonment with an appropriate non-parole period would be imposed in such a case.[16] In view of the mitigating circumstances and the exceptional circumstances in the applicant’s case, it was appropriate to impose a term of imprisonment in combination with an onerous community corrections order.[17]
[16]Ibid [27].
[17]Ibid [28].
Accordingly, the judge imposed an aggregate sentence of twelve months’ imprisonment, in combination with a community corrections order for two years, with special conditions that the applicant be under the supervision of a corrections officer, that, during the period of the order, she perform 150 hours of unpaid community work, that she undertake assessment and treatment for mental health, and that she undertake programs to reduce the risk of reoffending during the period of the order.
Submissions
In support of the proposed ground of appeal, counsel for the applicant submitted that the case was ‘plainly’ one which was on the ‘threshold’ between a partially custodial and wholly non-custodial sentence. In those circumstances, it was submitted, applying the sentencing principle of parsimony, the effect of a custodial sentence on the applicant’s young child should have ‘tipped the scales’ in favour of a sentence consisting solely of a community corrections order. Further, it was submitted that the judge gave insufficient weight to the development of the applicant’s personality disorder following the termination of her pregnancy during the abusive relationship which she endured with her longstanding partner.
Counsel for the applicant submitted that there were significant mitigating factors in favour of the applicant. The applicant had pleaded guilty at the earliest possible opportunity and the matter had proceeded by way of hand-up brief. Thus, the plea had significant utilitarian benefit, particularly as it was entered in the context of the COVID-19 environment. The applicant had no previous criminal history, and a number of character references attested that she was a person of good behaviour. Her offending occurred in a context in which she was juggling responsibilities while in a dysfunctional and abusive relationship and in which she suffered an emotional collapse on the termination of her pregnancy. Counsel further noted that there was a delay of three years and three months in the resolution of the proceedings as a result of the civil proceeding. That delay was significant, it was submitted, because the applicant had ceased to offend when she became pregnant. Further, the applicant had undertaken substantial steps to rehabilitate herself and to address the underlying causes of her addiction before the commencement of either civil or criminal proceedings against her.
In addition, counsel noted that the applicant had repaid $400,000 to the victim, and that she had done so before any complaint was made to the police. Further counsel noted that as a mitigating factor, the applicant had voluntarily assisted authorities in the prosecution of the former bookkeeper of the Vehicle Development Corporation, and that she had given an undertaking to the Court that she would give evidence in respect of the prosecution in that matter.
Counsel further noted that the judge accepted that the family hardship to the applicant’s son if the applicant were imprisoned was an exceptional circumstance, particularly in the context of the current pandemic which, it was submitted, was a significant mitigating factor.
Based on those mitigating circumstances, it was submitted that the appropriate disposition should have been by way of a lengthy community corrections order which would have addressed the applicant’s complex problems.
In response, counsel for the respondent pointed out that, on the plea, defence counsel accepted that it was open to the judge to impose a sentence that combined a term of imprisonment with a community corrections order, although defence counsel’s primary submission had been that a community corrections order alone was justified in the case. Counsel for the respondent submitted that, in view of that concession, it may be difficult for the applicant to now submit that the sentence imposed by the judge was manifestly excessive.
Further, counsel for the respondent submitted that the applicant was sentenced for very serious offending, which ordinarily would have attracted a sentence of a term of imprisonment with a non-parole period. The applicant had participated in the systematic, planned and dishonest obtaining of $631,697.84 from her employer through 126 fraudulent transactions which involved sums of money that ranged between $1,100 and $50,000. The applicant was then a Certified Practising Accountant, and she had used her skills and professional duties as an accountant to conduct her offending. In those circumstances, it was submitted, the sentencing purpose of general deterrence was of significant importance.
Counsel for the respondent also noted that, in submissions to this Court, the applicant has relied on factors which were not relied on before the sentencing judge, namely, the applicant’s personal history, the best interests of her son, and the pandemic environment.
Counsel for the respondent noted that the judge took into account the mitigating factors relied on by the applicant. It was submitted that the judge was generous in taking into account the delay in circumstances in which she had benefited from it. While the applicant had made reparation of $400,000, that had occurred in the context of a settlement of a civil proceeding against her in the Supreme Court. Thus, the amount paid was a civil debt owed to the victim, and not money paid to the victim voluntarily as a recognition of the fraud committed by the applicant.
Counsel for the respondent further submitted that, contrary to the contention advanced on behalf of the applicant, the nature of the applicant’s personality disorder and her addiction to gambling are not of themselves a mitigating circumstance. The judge correctly took into account, in the applicant’s favour, that she had made extensive attempts to address her gambling problem, but, counsel for the respondent noted, there were aspects of the applicant’s personality structure that required further attention.
Counsel for the respondent further noted that on the plea it was not put that the applicant ceased gambling when she became pregnant. Such a proposition was not supported by the evidence of Mr Hanley. In any event, the fact that the applicant had been able to voluntarily cease gambling could not be a mitigating factor, since it demonstrated that the applicant could have controlled her gambling urges.
Counsel for the respondent further noted that, in Markovic, the Court of Appeal characterised family hardship not as a mitigating factor in the sense of sentencing synthesis, but rather as an aspect of mercy in the sentencing process. Further, it was submitted, a sentencing court could not permit such a factor to overwhelm the true purposes for which sentence is required.
In the circumstances, counsel submitted that the sentence imposed on the applicant was lenient in light of the gravity of the offending, the applicant’s high moral culpability and the aggravating features of the offending.
Analysis and conclusion
In order to grant leave, on the ground that the sentence was manifestly excessive, it must be reasonably arguable that the sentence imposed by the sentencing judge was wholly outside the range of sentencing options available to his Honour.[18]
[18]Clarkson v The Queen (2011) 32 VR 361, 364 [89]; [2011] VSCA 157 (Maxwell ACJ, Nettle, Neave, Redlich and Harper JJA).
The starting point is that the offending in this case was particularly serious. It involved a gross breach of trust by the applicant, who, as a Certified Practising Accountant, was placed in a position of particular responsibility by her employer. The first instance of the offending occurred a short time after the applicant had commenced her employment with Clutch Industries. The offending only ceased after the applicant terminated her employment with the company. The offending occurred over a period of four years and one month. It involved 126 separate fraudulent transactions undertaken by the applicant. Her offending was systematic, planned and grossly dishonest. The total sum involved in the offending, $631,697.84, was very large. In the circumstances, the applicant’s moral culpability was particularly high.
The applicant did not commit the offending due to any pressing financial need or other such circumstance. Rather, the offending enabled her to indulge in repeated high-volume gambling to which she was addicted. The judge correctly noted that the applicant’s gambling addiction explained why she embarked on such systematic dishonesty, but it did not mitigate her offending.[19]
[19]R v Grossi (2008) 23 VR 500, 514–18 [51]–[57]; [2008] VSCA 51 (Redlich JA).
In cases involving white collar fraud, such as that engaged in by the applicant, it has been long recognised that the courts must give priority to the sentencing principle of general deterrence. In particular, it is important, in cases such as the present, that the sentence imposed by the court be sufficient to constitute a clear and unequivocal message that those, who choose to involve themselves in the type of fraudulent crime, which was committed by the applicant, will, upon detection, suffer long terms of imprisonment.[20]
[20]DPP v Bulfin [1998] 4 VR 114, 131–2 (Charles JA); DPP (Cth) v Couper (2013) 41 VR 129, 149 [118]; [2013] VSCA 72 (Tate JA); Majeed v The Queen [2013] VSCA 40, [44] (Kaye AJA); Zaia v The Queen [2020] VSCA 9, [108] (Kyrou, Kaye and McLeish JJA).
Similarly, in such cases, the principle of denunciation is ordinarily given prominence. It is necessary that in cases such as this, the sentence imposed on the offender is sufficient to express the condemnation by the courts and the community of the type of offending in which the applicant engaged. Such offending strikes at the heart of commercial enterprises, undermines trust in employees, and, not infrequently, has an unfair impact on innocent fellow employees.
In those circumstances, in the absence of cogent mitigating circumstances, the sentence imposed on the applicant in this case was particularly lenient. Indeed, in the absence of such circumstances, it might well be concluded that such a sentence was manifestly inadequate to vindicate the sentencing purposes to which I have just referred.
As was recognised by the judge, there were, however, important mitigating circumstances. The applicant pleaded guilty at the earliest opportunity, and the judge accepted that it was evidence of remorse on her behalf. It also had an important utilitarian value, sparing the community and witnesses the burden of a committal and a complex criminal trial. The applicant had no previous or subsequent convictions, and the character references tendered on her behalf spoke well of her values, family loyalty, and decency. The applicant made ready admissions when questioned by the police. She has made substantial reparation, although, as pointed out by counsel for the respondent, it was not entirely voluntary, but rather as the product of the civil proceeding instituted against her and her mother by Clutch Industries. The judge regarded the delay of three years, between the commission of the offences and sentence, as a mitigating circumstance.
As I have observed, the fact that the applicant’s offending was driven by her gambling addiction is not a mitigating circumstance. However, that addiction itself developed in the context of an abusive and manipulative relationship with a partner who, it seemed, exploited her in a quite egregious manner. Importantly, the applicant has undertaken a course of rehabilitative therapy, and she has taken steps to ensure that she is excluded from any gambling venues which might otherwise reignite her addiction.
The applicant also relied, as a mitigating circumstance, on the hardship that would ensue to her two year old son if she were sentenced to a term of imprisonment. Ordinarily, the courts do not take into account hardship occasioned to an offender’s family as a mitigating circumstance. However, as the Court has explained in Markovic, in exceptional circumstances, family hardship may be taken into account in the exercise of the sentencing discretion, as an exercise of mercy properly extended by the court in such a case.[21] In the present case, the judge understandably formed the view that the circumstance, that the applicant’s two year old son would, upon the sentence of the applicant, spend some twelve months in prison with his mother, in difficult circumstances arising from the current COVID-19 pandemic, constituted such an exceptional circumstance. That consideration was, of course, relevant in moderating the sentence that was otherwise to be imposed on the applicant. However, it did not, either of itself, or in combination with the other mitigating circumstances, necessitate that the judge so moderate the sentence as to not impose a term of imprisonment at all.
[21]Markovic (2010) 30 VR 589, 591–2 [3]–[7]; [2010] VSCA 105 (Maxwell P, Nettle, Neave, Redlich and Weinberg JJA).
In summary, the offending by the applicant in this case was particularly serious. It involved a gross breach of trust by her. Her moral culpability for the offending could only be described as particularly high. As I have observed, in the absence of mitigating circumstances, the sentence imposed on the applicant was very lenient, if not manifestly inadequate. It seems clear that only by according full weight to all of the mitigating circumstances recognised by his Honour, that the judge, in an exercise of mercy, imposed a sentence that will require the applicant to serve one year in custody, in combination with a community corrections order for two years.
I do not consider that it is reasonably arguable that, in the circumstances, the sentence imposed by the judge was manifestly excessive. That is, I do not consider that, in the circumstances of the case, it is reasonably arguable that it was not open to the judge to impose any sentence other than one that was wholly non-custodial.
In that respect, it is relevant, for the purposes of this application, that on the plea, defence counsel at least three times acknowledged that it was open to the judge to impose a combination sentence involving both a term of imprisonment and a community corrections order. On the first such occasion, in answer to a question by the judge as to whether a combination sentence would be appropriate, defence counsel stated:
That’s another option that is plainly open in my submission.
For the foregoing reasons, the proposed ground of appeal is not reasonably arguable. Leave to appeal must be refused.
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