Maddock v The Queen
[2020] VSCA 271
•29 October 2020
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S EAPCR 2020 0015
| ANTHONY EDWARD MADDOCK | Applicant |
| v | |
| THE QUEEN | Respondent |
---
| JUDGES: | MAXWELL P and WEINBERG JA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 19 October 2020 |
| DATE OF JUDGMENT: | 29 October 2020 |
| MEDIUM NEUTRAL CITATION: | [2020] VSCA 271 |
| JUDGMENT APPEALED FROM: | [2019] VCC 2213 (Judge C Ryan) |
---
CRIMINAL LAW – Appeal – Sentence – Four charges of theft – Applicant franchise broker – Four separate victims – Offending spanned period of about 15 months – Total stolen just over $216,000 – Aggregate sentence of 2 years with non-parole period of 15 months – Whether sentence and non-parole period manifestly excessive – Sentence well within range – Leave to appeal refused.
---
| APPEARANCES: | Counsel | Solicitors |
| For the Applicant: | Ms A M Kapitaniak and Mr P J Smallwood | Robert James Lawyers |
| For the Respondent: | Ms D I Piekusis QC | Ms A Hogan, Solicitor for Public Prosecutions |
MAXWELL P
WEINBERG JA:
On 27 August 2019, the applicant, Anthony Maddock, pleaded guilty in the County Court at Melbourne to four charges of theft. A plea hearing was conducted on 17 December 2019. On 19 December, he was sentenced as follows:
Charge on Indictment Offence Maximum Sentence
1 Theft [s 74 — Crimes Act 1958] 10 years Aggregate sentence of 2 years’ imprisonment 2 Theft [s 74 — Crimes Act 1958] 10 years 3 Theft [s 74 — Crimes Act 1958] 10 years 4 Theft [s 74 — Crimes Act 1958] 10 years Non-parole period: 1 year and 3 months Pre-sentence detention declared: 2 days Section 6AAA statement: 3 years’ imprisonment, with a non‑parole period of 2 years
By notice dated 15 January 2020, the applicant seeks leave to appeal against both the head sentence, and the non-parole period, on the sole ground of manifest excess. The particulars to that ground are:
(a)Those sentences were each manifestly too long; and
(b)The wrong type of sentence was imposed.
For the reasons that follow, we would refuse leave to appeal.
Circumstances surrounding the commission of the offences
At the time of the offending, the applicant was the sole director of ‘SF Global Pty Ltd’, a company registered in Victoria. He operated a business called ‘Solutions Franchising Group’. That business involved facilitating the purchase and sale of ‘Coffee Club’ franchises, particularly in Western Australia.
The victims of charge 1 were Mr Deepak Chawla and his wife, Roshni. They contacted the applicant in late 2014 to express their interest in purchasing a Coffee Club franchise in Western Australia.
In February 2015, the applicant met with Mr and Mrs Chawla in Western Australia. Mr Chawla requested details concerning the business plan, and sought the provision of cash flow documents. The applicant told him that before he could release those documents, a deposit of $22,000 would have to be paid into his trust account.
On 2 March 2015, Mr Chawla paid that sum into the trust account. Solutions Franchising Group issued a receipt to Mr Chawla.
On 27 March 2015, Mr and Mrs Chawla decided, for various reasons, not to proceed with the purchase. Mr Chawla requested the return of the deposit from the Coffee Club franchise. When the money was not forthcoming, he instead sought a refund from the applicant. As it happened, that money was never returned. It was instead misappropriated by the applicant and used for his own purposes (giving rise to charge 1).
The victims of charge 2 were Deric Won and his wife, Evelyn. In October 2014, they made enquiries about purchasing a Coffee Club franchise in Perth. In February 2015, Mr Won met with the applicant in person in Western Australia. On that occasion, they discussed the details associated with the purchase of a franchise.
On 30 March 2015, Mr and Mrs Won signed an agreement to purchase a particular Coffee Club franchise in Harrisdale, Perth. A condition of that agreement was that they pay a deposit of $22,000 to SF Global Pty Ltd. Between 1 April 2015 and 8 April 2015, they paid that amount in three separate instalments. On 15 April 2015, the applicant acknowledged receipt for that deposit via email.
After several delays, and upon discovery that the Harrisdale site was no longer available, Mr Won approached the Coffee Club franchise and requested a refund of his deposit. The franchise advised him that it had not received any sum by way of deposit from the applicant.
Eventually, the Coffee Club franchise repaid the entire amount of $22,000. It did so only after Mr Won had assigned his right of recovery against the applicant to the franchise. It subsequently transpired that the franchise was unable to recover any of that money from the applicant, who had used it for his own purposes (giving rise to charge 2).
The victims of charge 3 were Kevin Gooch and his wife, Joanne. They were franchisees and operators of a Coffee Club franchise located at a shopping centre in Perth. In late 2014, they found themselves, by reason of Mrs Gooch’s extreme ill‑health, forced to sell their franchise. The applicant arranged for the sale of the business.
On 15 July 2015, the applicant, acting as broker, organised for that particular franchise to be sold for $670,000, with a deposit of $100,500 to be paid by the purchaser. The deposit holder was SF Global Pty Ltd. On 25 May 2015, the deposit was paid to Solutions Franchising Group.
On 17 November 2015, the sale price for the franchise was adjusted down to $590,000. The deposit amount of $100,500, however, remained the same.
On 15 March 2016, settlement was completed. The deposit money was then to be paid by Solutions Franchising Group to Mr and Mrs Gooch. That money was never forthcoming. It turned out that the applicant had misappropriated the entire amount over a period of several months, between May and August 2015, and used it for his own purposes (giving rise to charge 3).
The victims of charge 4 were Chris Dellit, Karen Lewis, and Rhonda Lewis. They were the joint owners of a Coffee Club franchise in Perth. In mid-to-late 2015, they decided to sell the franchise. Once again, as in relation to charge 3, the applicant acted as broker with regard to the proposed sale.
It was agreed that the franchise would be sold for $750,000, with a deposit of $127,500. On 30 September 2015, the purchaser paid that sum to Solutions Franchising Group.
On 1 February 2016, settlement was completed. On that day, the applicant told Mr Dellit that the deposit moneys would be forwarded to the vendors the following day. That did not occur, and the money was never paid. Between September 2015 and February 2016, the applicant used the deposit money for his own purposes (giving rise to charge 4).
Procedural history
On 9 May 2017, the applicant was interviewed by police. He made a number of admissions. These included that his business had been in financial difficulty at the time of the offending, that the victims had never received the sums to which they were entitled, and that the moneys were irretrievably lost. He was charged with these various thefts some nine months later, on 21 February 2018.
The matter was initially contested. Between March and August 2018, this resulted in a number of committal mentions in the Magistrates’ Court. A trial was fixed to commence in the County Court on 26 August 2019. However, ongoing negotiations took place. Very late in the piece, just before a jury was empanelled, the matter resolved to a plea of guilty to the four charges that are the subject of this application.
Sentencing remarks
After briefly setting out the background facts, the judge turned to the victim impact statements prepared by Mr Chawla, Mr Gooch, Mr Dellit, and Ms Karen Lewis. They each spoke of how profoundly they had been affected by the applicant’s conduct. Each said that they had laid bare, to the applicant, their personal circumstances, and that they had trusted him implicitly. In his Honour’s terms, this rendered the extent of the applicant’s breach of trust, ‘palpable’.[1]
[1]DPP v Maddock [2019] VCC 2213, [22] (‘Reasons’).
The judge then turned to the applicant’s subjective circumstances. At the time of sentence, he was aged 60. He had completed a Bachelor of Business in 1979, and subsequently obtained a Diploma in Marketing in 1997, and a Diploma in Management in 2000.
In November 2016, the applicant’s company, SF Global Pty Ltd, was placed in administration. In April 2018, he was declared bankrupt as a result of the collapse of his entire business.
The judge briefly turned to a number of character references tendered on the plea. These were provided by the applicant’s long-term partner, and two of his former business associates. They spoke of his generosity, kindness, and honesty, making it clear that those who provided them regarded these offences as wholly out of character.
His Honour also referred to the report of Mr Patrick Newton, a forensic psychologist, prepared on 24 November 2019. Mr Newton’s report was not relied upon in any Verdins[2] sense, but did speak of the anxiety and financial pressures that the applicant had experienced at the time of the offending.
[2]R v Verdins (2007) 16 VR 269; [2007] VSCA 102 (‘Verdins’).
The judge then turned to the submissions put forward on behalf of the applicant on the plea. His counsel had argued that the context within which the offending took place involved cash flow problems in the applicant’s failed business ventures. She submitted that the offending itself had been crude, and lacked sophistication. She noted that he had taken no measures to avoid detection, which she submitted had been inevitable.
The judge expressed a degree of scepticism regarding that particular submission. He noted that the applicant was not an employee and, therefore, had not been under any direct supervision. His books, and accounting records, were not subject to independent review. To that end, his Honour observed, the applicant had been under no immediate need to take steps to seek to avoid detection.
Counsel for the applicant on the plea had also submitted that there was no evidence that he had acted out of greed, or even a desire to enrich himself. The judge himself described the applicant’s conduct as ‘robbing Peter to pay Paul’,[3] which, while not unusual in cases of this kind, did serve to differentiate it from some other forms of white collar offending.[4]
[3]Reasons, [23].
[4]Ibid.
The judge also noted that counsel for the applicant had submitted that the appropriate disposition should be a wholly non-custodial, but lengthy, community correction order (‘CCO’). That order could include onerous supervision and community work conditions. In that regard, counsel relied upon her client’s guilty plea which, though belated, had considerable utilitarian value. She also relied upon the applicant’s prior good character and what she submitted to have been the lengthy delay in prosecution.
The judge rejected the submission that a CCO with such conditions, without any term of imprisonment, would suffice to ‘meet the purposes of sentencing appropriate to [the applicant].’[5]
[5]Ibid [31].
His Honour acknowledged that the applicant was entitled to the benefit of his plea of guilty. He also accepted that the plea itself was ‘some evidence of [the applicant’s] remorse’.[6] Further, he accepted that the significant delay between the offending, which occurred in 2015 and 2016, and the date of sentence, in December 2019, should be given some weight by way of mitigation. He added, however, that he did not regard the delay, between the time that police became involved in May 2017 and the plea hearing in December 2019, as having been inordinate.
[6]Ibid [35].
The judge acknowledged that while the sums of money stolen,[7] as particularised in the four charges in the indictment, may not have been as great as those which featured in other cases that had come before the County Court, they were not insubstantial. The offending had been serious, repetitive, and had taken place over a long period. However, his Honour accepted that it lacked the presence of certain aggravating features, such as a desire for personal enrichment, or the expenditure of funds on high value items.
[7]Charge 1: $22,000, charge 2: $22,000, charge 3: $95,905.15, and charge 4: $76,896, making a total of $216,801.15.
The judge assessed the applicant’s prospects of rehabilitation as ‘good’.[8] His Honour then determined that an aggregate sentence should be imposed, and sentenced the applicant as indicated above.
[8]Reasons, [39].
Applicant’s submissions before this Court
The overall submission was that the aggregate sentence of 2 years’ imprisonment, with a non-parole period of 15 months, was manifestly excessive. Moreover, it was submitted that the imposition of an immediate term of imprisonment was more severe than necessary to achieve all relevant sentencing purposes. These could adequately have been met by a CCO alone, with no custodial term, or at worst, a combination sentence.
In support of that submission, counsel for the applicant sought to rely upon his ‘otherwise impeccable’ character. They also relied upon the circumstances of the offending, noting that it had occurred in the context of severe cash flow difficulties. They submitted that it lacked the hallmark of having been engaged in for sheer greed and noted again, as had been contended before the judge below, that it was unsophisticated, and destined to be detected.
Further, counsel pointed to the applicant’s admissions, and his ultimate guilty plea, as indicative of remorse and an acceptance, on his part, of responsibility for his actions. Finally, they relied upon the judge’s observation, in his sentencing remarks, that the applicant’s prospects of rehabilitation were ‘good’.
With regard to the submission that a CCO, without any custodial term, was appropriate in the circumstances, counsel pointed to Mr Newton’s report, in which he spoke of the applicant’s need for treatment for anxiety and depression. Further, counsel sought to rely upon this Court’s decision in Boulton v The Queen[9] to the effect that a CCO is, itself, punitive and can, in an appropriate case, fulfil all relevant sentencing needs.[10]
[9](2014) 46 VR 308; [2014] VSCA 342 (‘Boulton’).
[10]Ibid 337 [122], [124]–[126].
Counsel took issue with several of the judge’s observations in his sentencing remarks. First, they submitted that his Honour’s rejection of the submission that the offending was not sophisticated of itself demonstrated that he had failed to recognise the relevance of that factor in his assessment of the objective gravity of these offences.
Second, counsel submitted that the judge had failed adequately to take into account the evidence of remorse, including that which was contained within Mr Newton’s report. In that regard, counsel submitted that the judge’s finding that the applicant had merely demonstrated ‘some remorse’ must have been based solely on his plea of guilty, whereas Mr Newton’s report provided additional, and actual, evidence of remorse beyond that embodied within the plea.
Third, counsel took issue with the judge’s reluctance to characterise the plea as having been entered at an early stage. They submitted that, properly understood, it had been an early plea to an appropriately drafted indictment.
Fourth, counsel submitted that there was no warrant for the judge’s conclusion that the delay between the offending and sentence was ‘not inordinate’. That conclusion failed to take into account what this Court had said in R v Merrett,[11] namely, that
the relevance of delay lies … in the effect which the lapse of time — however caused — has on the accused. Delay constitutes ‘a powerful mitigating factor’. In particular, it focuses attention on issues of rehabilitation and fairness.[12]
[11](2007) 14 VR 392; [2007] VSCA 1.
[12]Ibid 400 [35] (citation omitted).
Fifth, counsel took issue with the judge’s use of the word ‘brazen’ to characterise the applicant’s conduct. They submitted that these offences, committed under the pressure of sheer desperation, associated with the need to keep a failing business afloat, did not merit that particular epithet.
Sixth, counsel submitted that the judge’s conclusion, during his discussion of why a CCO was not appropriate, that there was no basis for a treatment and rehabilitation condition, failed to consider ‘medical assessment and treatment or any program that addresse[d] factors that were related to the offending behaviour.’
Respondent’s submissions before this Court
Senior counsel for the respondent submitted that the aggregate sentence of 2 years’ imprisonment with a non-parole period of 15 months sat ‘comfortably within the bounds of his Honour’s sound discretionary judgment.’ She submitted that the sentencing remarks revealed no misapplication of principle, and argued that leave should be refused.
Senior counsel, in her written case, submitted that as she understood the applicant’s position, he sought to argue that ‘the imposition of any gaol at all was not within range.’ In addressing that argument, she briefly summarised the prosecutor’s submissions on the plea. She noted that the prosecutor had called for an immediate term of imprisonment, with a head sentence and non-parole period. True it was that the prosecutor below had acknowledged that a combination sentence might be within range, but he had told the judge that:
a term of imprisonment immediately served is required. Whether subsequently to that there is to be a non-parole period and release on parole or there’s to be a community corrections order, is a question for your Honour.
Senior counsel submitted that despite the prosecutor’s concession below that a combination sentence might be within range, the judge had concluded, as he was entitled to do, that such a sentence would fall short of what was required to give effect to the needs of general deterrence, denunciation, and appropriate punishment. The fact that a combination sentence might reasonably have been within range, even assuming that that was so, did not mean that the sentence actually imposed was outside the range.
Senior counsel submitted that the applicant’s offences involved ‘serious examples’ of white collar crime. The offending had been repetitive, and had taken place over more than a year. It had also involved major breaches of trust, plainly a significant aggravating factor.
With regard to the mitigating factors, senior counsel submitted that the judge had taken these all into account, and given them proper weight. Further, she submitted that the absence of any evidence of actual enrichment, apart from the money stolen being used to meet debts, did not constitute a mitigating factor. Rather, it should be viewed as nothing more than the absence of an aggravating factor of a kind that might be present in other cases.
With regard to the applicant’s complaint regarding the judge’s use of the term ‘brazen’, it was submitted that at least in relation to charges 3 and 4, that term was apt. By the time those offences were being committed, each involving a series of specific misappropriations, it could not be said that the applicant’s conduct was either unplanned, or in any way opportunistic.
Conclusion
The principles that govern sentencing for offences of this type are well established. In Director of Public Prosecutions v Bulfin,[13] an appeal against sentence with regard to ‘white collar’ offending, Charles JA said:
Whatever the motivation, offences of the kind here in question almost invariably involve a carefully calculated course of conduct over a long period, repeated deliberate acts of dishonesty, substantial amounts of money, and, frequently, losses (often tragic in their impact) to large numbers of small investors. The offender often holds a position making it possible, or has the ability, to disguise or camouflage the conduct in question. Detection is difficult, the investigation of the crime usually lengthy and very expensive, and the problems of trial and proof will frequently be extreme … The result of such considerations, in my view, is that the element of general deterrence will usually carry particular significance in sentencing for crimes such as the present, both in relation to the total effective sentence and the non-parole period; together with a requirement for strong denunciation by the sentencing court.[14]
[13][1998] 4 VR 114 (‘Bulfin’).
[14]Ibid 132 (Charles JA, Winneke P agreeing 115, Callaway JA agreeing at 141).
In Director of Public Prosecutions (Cth) v Gregory,[15] this Court emphasised the importance of general deterrence as a sentencing principle in relation to white collar crime. The Court observed:
Moreover, general deterrence is likely to have a more profound effect in the case of white collar criminals. White collar criminals are likely to be rational, profit seeking individuals who can weigh the benefits of committing a crime against the costs of being caught and punished. Further, white collar criminals are also more likely to be first time offenders who fear the prospect of incarceration.[16]
[15](2011) 34 VR 1; [2011] VSCA 145.
[16]Ibid 16 [53] (citation omitted).
In Dyason v The Queen,[17] this Court considered whether the importance of general deterrence in sentencing white collar offenders, as stated by Charles JA in Bulfin, had withstood Boulton. It said:
As Boulton explains, the mandatory conditions which always exist on a CCO and the additional conditions which can be imposed have significant punitive elements. The community work condition is the only condition which the legislation describes as being for the purpose of punishment (s 48C(2)), but that does not detract from the reality that the other conditions have punitive operation. This Court has emphasised the need to re-evaluate the types of offending which attract imprisonment in that context.
It seems to us, however, that none of that affects the continuing relevance of Charles JA’s analysis in Bulfin.
…
This is not to suggest that a sentence involving a CCO would never be appropriate for a ‘white collar’ offender, but rather that the considerations referred to in Bulfin, as reiterated by this Court in Gregory, remain relevant.[18]
[17](2015) 251 A Crim R 366; [2015] VSCA 120.
[18]Ibid 373–4 [37]–[38], [40].
The present case was one which had a particularly important aggravating feature. It involved appalling breaches of trust. The applicant was well aware of the personal circumstances of each of his victims, and how devastating the loss of any significant sum would be, so far as they were concerned. The objective gravity of his offending was of a very high order.
We emphasise that the impact of the applicant’s conduct upon at least the victims of charges 1, 3, and 4, was profound, as is apparent from the victim impact statements. Fortuitously, the victims of charge 2 were eventually able to recover their deposit, but that scarcely diminishes the trauma and uncertainty to which they were subjected.
We accept the Crown’s submission that the judge’s use of the term ‘brazen’ to describe the applicant’s conduct was wholly appropriate, particularly when applied to the offending giving rise to charges 3 and 4. The misappropriations involved in those charges were repetitive, and committed well after the applicant had an opportunity to reflect upon the wrongfulness of his earlier conduct.
The fact that the applicant was a person of prior good character, though still a mitigating factor, carried less weight in a case of this kind, involving massive breaches of trust, than it might otherwise do. It was, after all, the applicant’s prior good character which, in a sense, enabled him to build up his business, and carry out these offences. That is so often true in cases of white collar offending.
In our view, the judge dealt appropriately with delay as a mitigating factor. Fraudulent conduct of this kind often takes time to be fully investigated. The period from when the police first became involved until the matter was resolved was, as the judge described it, not inordinate in the circumstances. Nonetheless, the applicant was given some measure of mitigation by reason of that delay, and that is reflected in the sentence actually imposed.
In our view, the aggregate sentence and non-parole period were both clearly within range. The fact that the prosecutor on the plea conceded that a combination sentence might also be within range does not demonstrate that this sentence was wholly outside the range. Leave to appeal must be refused.
---
5
4
0