McKittrick v R
[2014] NSWCCA 128
•16 July 2014
Court of Criminal Appeal
New South Wales
Case Title: McKittrick v R Medium Neutral Citation: [2014] NSWCCA 128 Hearing Date(s): 2 April 2014 Decision Date: 16 July 2014 Before: Simpson J at [1]
Davies J at [48]
Adamson J at [147]Decision: 1. Grant leave to appeal;
2. Allow the appeal in part;
3. Quash the sentence imposed by Maiden DCJ in respect of sequence 4;
4. In lieu thereof, in respect of that offence, the Applicant be sentenced to imprisonment made up of a non-parole period of 1 year, commencing on 27 May 2015 and expiring on 26 May 2016, with a balance of term of 2 years and 6 months, expiring on 26 November 2018.Catchwords: CRIMINAL LAW - sentencing - obtain financial advantage by deception - multiple counts - two Ponzi schemes at different times in different locations - second scheme operated while applicant on bail from charges relating to first scheme - amounts involved exceeding $13 million - losses exceeding $1 million - delay in charging for second scheme - whether taken into account on sentence - totality principle - sentencing by different judges for each scheme - whether second judge had regard to totality of offending and sentence imposed by first judge - accumulation and effect on statutory ratio - variation to non-parole period Legislation Cited: Crimes Act 1900 (NSW)
Crimes (Sentencing Procedure) Act 1999 (NSW)
Criminal Appeal Act 1912 (NSW)
Sentencing Act 1989 (NSW)Cases Cited: AB v R [2014] NSWCCA 31
Abbas, Bodiotis, Taleb and Amoun v R [2013] NSWCCA 115
Baghdadi v R [2012] NSWCCA 212
House v The King (1936) 55 CLR 499
John Michael Higgins v R [2006] NSWCCA 38
Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357
Mill v The Queen (1988) 166 CLR 59
Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120
Pearce v The Queen (1998) 194 CLR 610
R v Blanco [1999] NSWCCA 121; 106 A Crim R 303
R v Boulden [2006] NSWSC 1274
R v Cameron [2005] NSWCCA 357
R v Kelly [2006] NSWSC 1142
R v MAK (2006) 167 A Crim R 159
R v Todd [1982] 2 NSWLR 517
R v V (1998) 99 A Crim R 297Texts Cited: New South Wales Legislative Assembly Parliamentary Debates (Hansard), 10 May 1989 Category: Principal judgment Parties: Patricia Lillian McKittrick (Applicant)
CrownRepresentation - Counsel: Counsel:
A Miller (Applicant)
N Noman SC (Crown)- Solicitors: Solicitors:
Bell Lawyers (Applicant)
Solicitor for Public Prosecutions (Crown)File Number(s): 2011/415324 Decision Under Appeal - Before: Maiden DCJ - Date of Decision: 25 July 2012 - Court File Number(s): 2011/415324
JUDGMENT
SIMPSON J: I have read in draft the judgment of Davies J. His Honour's comprehensive statement of relevant facts and circumstances enables me to be brief in that respect. I agree with Davies J that grounds 1 to 3, 6, 7, 8 and 9 ought to be rejected. In respect of grounds 4 and 5 I take a different approach. I am also of the view, notwithstanding that the Applicant has not made good her challenge to the structure of the sentences (grounds 1 to 3), that, nevertheless, there should be some adjustment of the structure of the sentences, for reasons to which I will come.
The relevant objective facts are as follows. In May 2003, in the Coffs Harbour district, the Applicant embarked on a criminal enterprise by which victims were defrauded of approximately $6 million. The criminal enterprise involved the applicant dishonestly persuading "investors" to entrust large sums of money to her for purported investment at high rates of return. No such investments were ever made; the applicant, from time to time, made payments to the "investors", but, far from being sourced from successful investment, these payments came from other unwary victims. Such enterprises are commonly referred to as "Ponzi schemes".
In April 2007 the Applicant broadened her activity and embarked upon an identical enterprise in the Newcastle/Hunter Valley area. At that time she was under investigation in Coffs Harbour. It is not clear whether she was aware of that investigation. In September 2007 she was arrested and charged in relation to the Coffs Harbour offences. She pleaded guilty to 15 charges of obtaining financial advantage by deception, and asked, pursuant to Pt 3 Div 3 of the Crimes (Sentencing Procedure) Act 1999 (NSW) that a further 19 offences listed on a Form 1 be taken into account on sentence. One offence involved the defrauding of the victims of the sum of $97,000; all others involved frauds of over $100,000, going as high as $300,000, $450,000 and $640,000.
The Applicant was granted bail. She ceased the Coffs Harbour operation, but, while on bail, continued the Newcastle/Hunter Valley operation, and did so until December 2008.
In May 2009 the Applicant was sentenced by Goldring DCJ in respect of the Coffs Harbour offences to a total term of imprisonment of 4 years and 6 months with a non-parole period of 3 years. The non-parole period was to expire on 27 May 2012. The Applicant lodged an application for leave to appeal against the sentences.
In August 2009 she was interviewed, from prison, in relation to the Newcastle/Hunter Valley enterprise. No record of that interview is before this Court. It is not known whether she then made admissions or not. In any event, that interview did not initially result in the laying of any charges.
In March 2010, counsel who represented the Applicant began pressing investigating police, by telephone and email, to advise what course they proposed to take with respect to the Newcastle/Hunter Valley operation. On 29 March 2010 he was advised that police were in possession of sufficient information to proceed with charges, which they would "endeavour" to bring by the end of April of that year. Counsel continued, from time to time, to seek information, and to note that no Court Attendance Notices had been served. He alluded to the possibility of an application for a stay of any proceedings, on the basis of the delay, and consequent oppression. Nevertheless, it was not until December 2011, just five months before the expiration of the Applicant's non-parole period, that Court Attendance Notices were issued. The only explanation that appears from the materials available to this Court was that one of the officers (possibly the officer in charge) was on an extended period of sick leave, and that the Local Command was suffering from shortage of resources.
On 10 December 2010, after having her attention drawn to the power of this Court to increase the sentences imposed (Criminal Appeal Act 1912 (NSW), s 6), the Applicant withdrew her application for leave to appeal against the Coffs Harbour sentences.
The Applicant first appeared before the Local Court in Newcastle in respect of the Newcastle/Hunter Valley Court Attendance Notices in February 2012, when she entered pleas of guilty for four counts of obtaining a financial benefit by deception. She asked that another 10 such offences on a Form 1 be taken into account. Thereafter, normal processes appear to have been followed. Sentence proceedings in the District Court commenced on 19 July 2012, before Maiden DCJ, when the Applicant adhered to the pleas of guilty earlier entered. She gave evidence, as did her husband, John McKittrick.
A substantial amount of material was before the sentencing judge, including material relevant to the Coffs Harbour offences. Also placed before Maiden DCJ, on behalf of the Applicant, was a body of material indicating that the Applicant had taken steps to be declared bankrupt, and that that had happened.
For a total of 14 offences involving defalcations exceeding $1,000,000 Maiden DCJ sentenced the Applicant to terms of imprisonment totalling 6 years and 6 months, with a non-parole period of 5 years. That sentence was fixed to commence at the expiration of the Coffs Harbour sentences and was therefore fully accumulated on the sentences imposed by Goldring DCJ. That resulted in a total sentence (taking into account the Coffs Harbour sentence) of 9 years and 6 months, with a non-parole period of 8 years.
Against that background, I consider the Grounds numbered 4 (delay) and 5 (totality). I will also say something about Ground 9 (objective seriousness).
Ground 4: delay
I begin by observing that the delay in charging the Applicant with the Newcastle/Hunter Valley offences following the August 2009 interview, and the correspondence in March 2010 indicating that police were then in possession of sufficient information to bring charges, was entirely unacceptable. There is no evidence that the Applicant contributed in any way to the delay; indeed, on her behalf, representations were made, on at least two occasions, for a decision to be made as to whether she was to be charged, and, if so, that that be done expeditiously. The correspondence indicates that the Applicant was (or her legal advisers were) concerned to have all matters dealt with by the time the application for leave to appeal against the Coffs Harbour sentences came to a hearing.
That delay is a relevant sentencing consideration is well established: R v Todd [1982] 2 NSWLR 517; Mill v The Queen [1988] HCA 70; 166 CLR 59.
Todd and Mill are not entirely apposite. In each case the offender committed offences in close proximity of time, but in different states, as a result of which they were incarcerated, for lengthy periods, in one state, before returning to the other state for the offences there committed to be dealt with. In each case, it was held that the task of the second sentencing judge was to attempt to replicate the sentences that could be expected to have been imposed if all sentences had been imposed in a single sentencing exercise. In Mill the following was said:
"In our opinion, the proper approach which his Honour should have taken was to ask what would be likely to have been the effective head sentence imposed if the applicant had committed all three offences of armed robbery in one jurisdiction and had been sentenced at one time. It is most unlikely that the applicant would have been sentenced to eight years on the first count, eight years with six years of it concurrent on the second count, and eight years cumulative on the third count, making an aggregate head sentence of 18 years. Yet that, it seems to us, is the practical effect of the sentence imposed by his Honour ... Without statutory authority, the only course open to the second sentencing court is to adopt a lower head sentence that reflects the long deferment that has taken place during which the offender has been in custody. It is true that the lower head sentence will fail to reflect adequately the seriousness of the crime in respect of which it is imposed. That is unfortunate. However, it is to be preferred to the injustice involved in the imposition of a longer head sentence because of the inadequacy of the law to cope satisfactorily with the intervention of State boundaries."
As I have suggested, the circumstances are in no way comparable.
However, it has been recognised that delays of a lesser extent, and even where all offences are committed in this state, may also be a relevant sentencing consideration. In R v Blanco [1999] NSWCCA 121; 106 A Crim R 303, Wood CJ at CL, with whom Bell J and Smart AJ agreed, explained why that is so. He said:
"16 The reason why delay is to be taken into account when sentencing an offender relates first to the fact of the uncertain suspense in which a person may be left; secondly to any demonstrated progress of the offender towards rehabilitation during the intervening period; and thirdly, to the fact that a sentence for a stale crime does call for a measure of understanding and flexibility of approach ..." (internal citations omitted)
The first and second of these considerations are of some application in the present instance. I do not accept that the Newcastle/Hunter Valley offences, delayed though the charges were, amount to "stale crimes".
It does not follow, however, that in every case where delay has occurred in the prosecution of an offender, that circumstance necessarily results in a reduced sentence. In R v V (1998) 99 A Crim R 297, Wood J (as he then was), with whom Gleeson CJ and Barr J agreed, said, after referring to Todd:
"It is this principle that the applicant seeks to call in aid. However, it is clear from subsequent decisions of this court that Todd has not been viewed as authority for the proposition that wherever there is a stale offence or substantial delay leniency should necessarily be extended ...
As was pointed out in Thompson [Court of Criminal Appeal, 18 June 1996, unreported] each case depends on its own circumstances." (some internal citations omitted]
It is true that Maiden DCJ did not expressly undertake an exercise of the kind mentioned in Mill. However, the real question is whether this failure to do so resulted in any injustice to the Applicant. In my opinion, it did not.
The Applicant's offences could, on one view, be seen as a single continuing episode of criminality. However, so to approach her offending would not reveal the whole picture. The offences fall logically into two groups, not only because of the disparate geographical locations in which they were committed, but also by their timing. They overlapped for only a relatively short period. These circumstances mean that the offences could equally be seen as two consecutive episodes of similar criminality.
The second important circumstance that marks a barrier between the two sets of offences is that (except for the earliest of the offences) the Newcastle/Hunter Valley offences were committed while the Applicant was on bail for the Coffs Harbour offences. The flagrancy of her conduct ought not to be underestimated.
In my opinion, if Maiden DCJ had undertaken the Todd/Mill exercise, it would have been entirely open to him to impose wholly cumulative sentences. Moreover, anything other than a modest degree of concurrency would not have properly recognised the criminality involved in the two separate series of offences, and particularly the seriously aggravating feature that the Newcastle/Hunter Valley offences were committed while the Applicant was on bail in respect of identical offences.
Accordingly, while I accept that the Remarks on Sentence do not clearly disclose that Maiden DCJ moderated the sentences by reason of the delay, I am of the opinion that he was not obliged to do so. Further, I do not share the view of Davies J that these sentences could not be regarded as "lenient". I would reject this ground of appeal.
Ground 5: totality
Central to the argument concerning totality was the effect of the accumulation of the sentences imposed in respect of the Newcastle/Hunter Valley offences on the Coffs Harbour sentences, producing a total sentence of 9 years and 6 months with a non-parole period of 8 years.
Maiden DCJ was obliged to identify sentences appropriate to the offending, and any mitigating circumstances, in respect of each of the four counts before him, and taking into account the additional offences: Pearce v The Queen [1998] HCA 57; 194 CLR 610. It was then necessary to consider questions of accumulation or concurrency and of totality.
Totality has two aspects. It encompasses, first, the totality of the offending and, secondly, the totality of the sentences under consideration. It is in respect of the latter that questions of accumulation and concurrence have significance.
Maiden DCJ's first task was to assess the totality of the offending involved in the 14 offences before him (that is, including the offences listed on the Form 1). These were committed over a sustained period of a little over 2 years (April 2007 to May 2009), the majority committed while the Applicant had the benefit of a grant of bail. They involved 14 victims (counting couples as a single victim) defrauded, in many cases, of their life savings. A total sentence of 6 years and 6 months, with a non-parole period of 5 years was not, in my opinion, excessive, and not one that I would regard as severe.
The totality question then involves the accumulation on the Coffs Harbour sentences. That produced a head sentence of 9 years and 6 months. That is, again, not a sentence that I would consider severe. Encompassed within it are sentences for 48 offences, committed over a 6 year period, involving large amounts of money. The offending was carefully planned and implemented. There was no basis for it other than the Applicant's greed.
In my opinion, the question of totality was not overlooked in relation to the head sentence. Nor do I consider that a non-parole period of 8 years indicates that totality was overlooked. I have, however, for other reasons, come to the view that an adjustment ought to be made to the non-parole period. That is not for reasons of totality.
Ground 9: objective seriousness
In respect of objective seriousness, the first complaint made concerns a passing reference in the Remarks on Sentence to "an amount of $13,677,437" that had "passed through" various accounts of which the Applicant had control or in which she had an interest.
This strikes me as somewhat paradoxical, given the complaint about the asserted failure of his Honour to give adequate weight to the issue of totality. As set out above, the principle of totality calls for recognition of the totality of the offending, as well as of the sentences imposed. That the Applicant had dealt with sums of money in the amount mentioned was relevant to that assessment.
In any event, I agree with Davies J that the brief reference to that amount did not bear upon the sentences imposed. The reference was made in respect of two Commonwealth offences for which the Applicant was sentenced in the Local Court to terms of imprisonment that were fully concurrent with the Coffs Harbour sentences.
I am unable to agree with Davies J that the sentences imposed by Maiden DCJ were "severe" (see [142]). The amounts of money involved in the Newcastle/Hunter Valley offences were very large. Individual "investors" lost large sums of money - in one case just under $336,000, in another $312,000, and yet another $336,000. Others lost smaller, but nevertheless significant sums. Maiden DCJ took the view, correctly in my opinion, that these were offences of very high criminality. In respect of the other complaints made under this ground, I agree with Davies J.
I would reject this ground of appeal.
Grounds 1-3: the non-parole period
The complaint under these grounds is directed to the sentences, in aggregate, imposed by Maiden DCJ. The overall non-parole period is a little under 77 per cent of the total sentence. The non-parole period in respect of the third offence is 80 per cent of the total sentence imposed in respect of that offence.
Section 44(1) and (2) of the Crimes (Sentencing Procedure) Act 1999 (NSW) provide as follows:
"44 Court to set non-parole period
(1) Unless imposing an aggregate sentence of imprisonment, when sentencing an offender to imprisonment for an offence, the court is first required to set a non-parole period for the sentence (that is, the minimum period for which the offender must be kept in detention in relation to the offence).
(2) The balance of the term of the sentence must not exceed one-third of the non-parole period for the sentence, unless the court decides that there are special circumstances for it being more (in which case the court must make a record of its reasons for that decision)."This has come to be called the "statutory ratio", which is not to be departed from unless special circumstances are found. The effect of s 44(2) is that a sentence in accordance with "the statutory ratio" will be made up of a non-parole period that is 75 per cent of the head sentence. Where the court decides to impose a non-parole period in a lesser proportion, it is required to state its reasons for doing so.
There is no equivalent requirement for reasons where the non-parole period exceeds 75 per cent of the head sentence. Nevertheless, it is usually considered appropriate that reasons be given for such a decision.
Here, however, the increase was of less than 2 per cent. As Davies J has shown, the sentences achieved what Maiden DCJ intended.
There is no significance in the ratio between the non-parole period and the head sentence in relation to the third offence. When courts sentence sequentially for multiple offences, with some accumulation, it is common to depart from the statutory ratio in relation to individual offences. Sometimes this is done for the express reason of restoring that ratio in relation to the overall sentence.
The "statutory ratio" was first introduced into sentencing legislation in the Sentencing Act 1989 (NSW). That Act was intended to, and did, effect significant changes in sentencing procedures in NSW. In introducing the Sentencing Bill to the Legislative Assembly, the Minister for Corrective Services, Mr Yabsley, said:
"We have turned the sentencing process on its head, and in doing so we have produced a sentencing regime that everyone will be able to understand." (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 10 May 1989 at 7905)
Mr Yabsley went on to outline the major reforms contained in the Bill, and said:
"At present, the starting point for a court in sentencing a convicted person is the head sentence. Having set the head sentence, which is intended to reflect the gravity of the offence committed, the court turns its attention to the particular circumstances of the case before it. The court then sets a non-parole period. In many cases, the non-parole period is substantially less than the head sentence. The present sentencing system perhaps could be said to be based on a 'top down' approach. Part 2 of the bill contains a sentencing scheme which is quite different. Instead of working from the top down, the court will, under the new sentencing scheme, build its sentence from the bottom up.
I shall explain how the 'bottom-up' approach will operate. The court will begin by focusing on the question of how much time a person must spend in prison. The court's answer to this question will become the minimum term of imprisonment. The court will then turn its mind to the period that it thinks the prisoner should serve on parole. This period - to be called the additional term - will then be added to the minimum term of imprisonment.
In accordance with the bill, the court will need to set the additional term so that it equals one-third of the minimum term of imprisonment, unless the court decides that there are special circumstances ...
... The new sentencing scheme will give effect to the Government's undertaking that the non-parole period should be 75 per cent of the head sentence, to use the old terminology ..." (italics added)
Nowhere in the speech was any explanation given for the selection of 75 per cent as the proportion of the overall sentence required to be served in custody (other than to meet an election promise). What is plain is that the intention was that the proportion should apply, in cases of multiple offending, to the overall sentence, that is, the total of the sentences imposed. The structure of individual sentences is, at most, a secondary consideration.
I have gone into this rather lengthy exposition for the following reasons. Although, as I have said, I see no error in the proportions of the overall sentence imposed by Maiden DCJ (the increase on 75 per cent being minimal), in my opinion, it has been overlooked (and not a ground of appeal) that, when the sentences imposed by Maiden DCJ are added to the Coffs Harbour sentences imposed by Goldring DCJ, the proportion of the non-parole period to the head sentence is 84 per cent. That, in my opinion, does not conform with sentencing principle.
I would not, for myself, as is apparent from what I have said above, reduce the sentences by reason of error in the consideration of delay, totality, or objective seriousness. I am troubled, however, by the resultant disproportion between the non-parole period and the head sentence. I have considered the sentences proposed by Davies J. On the sentences proposed by his Honour, when added to the Coffs Harbour sentences, the non-parole period is 63 per cent of the overall sentence.
In my opinion, the sentences should be structured so as to restore, on the overall sentence to be served by the Applicant (including the Coffs Harbour sentences) the statutory ratio. That is, the overall non-parole period should approximate 75 per cent of the overall head sentence. I would not interfere with the total sentence of 9 years and 6 months. A non-parole period is the statutory ratio is a little over 7 years. I would structure the sentences to produce a non-parole period of 7 years. That can be achieved in the following way.
I would not interfere with the sentences imposed by Maiden DCJ other than that in respect of sequence 4. I propose that that sentence be varied only by specifying a non-parole period of 1 year, expiring on 26 May 2016. Against a head sentence of 3 years and 6 months, standing alone, that appears to be disproportionate. However, the effect is to bring the whole of the sentences, including the Coffs Harbour sentences, into line with s 44(2) of the Crimes (Sentencing Procedure) Act.
The orders I would make are:
(1)Grant leave to appeal;
(2)Allow the appeal in part;
(3)Quash the sentence imposed by Maiden DCJ in respect of sequence 4;
(4)In lieu thereof, in respect of that offence, the Applicant be sentenced to imprisonment made up of a non-parole period of 1 year, commencing on 27 May 2015 and expiring on 26 May 2016, with a balance of term of 2 years and 6 months, expiring on 26 November 2018.
DAVIES J: On 9 May 2012 in the Local Court the Applicant pleaded guilty to four counts of obtain a financial advantage by deception contrary to s 178BA Crimes Act1900 (NSW). She also asked that ten other offences contrary to the same section of the Act be taken into account.
The maximum penalty for each of the offences charged was imprisonment for five years.
On 25 July 2012 she was sentenced by Judge Maiden in the District Court at Newcastle as follows:
Sequence 1: Imprisonment for a fixed term of 12 months from 27 May 2012 expiring 26 May 2013;
Sequence 7: Imprisonment for a fixed term of 2 years commencing 27 May 2012 and expiring 26 May 2014;Sequence 3: (Taking into account three matters on the Form 1) Imprisonment for a non-parole period of 3 years to commence 27 May 2012 and expiring 26 May 2015 with the balance of term of nine months expiring 26 February 2016.
Sequence 4: (Taking into account seven matters on the Form 1) Imprisonment for a non-parole period of 2 years to commence 27 May 2015 and expiring 26 May 2017 with the balance of term of 18 months to expire on 26 November 2018.
The effective sentence was a non-parole period of five years from 27 May 2012 to 26 May 2017 with the balance of term of 18 months to expire on 26 November 2018.
The Applicant appeals on nine grounds as follows:
1. His Honour failed to make a finding of special circumstances;
2. His Honour erred in imposing an overall minimum non-parole period in excess of 75% of the total sentence;
3. His Honour erred in imposing a non-parole period in excess of 75% of the head sentence in relation to Count 3;
4. His Honour erred in failing to give sufficient weight to the delay in charging the Appellant;
5. His Honour erred in failing to give adequate weight to the issue of totality;
6. His Honour failed to give adequate weight to the Appellant's contrition and remorse;
7. His Honour failed to give adequate weight to the Appellant's medical condition;
8. His Honour erred in placing undue weight on the issue of General Deterrence in light of the Appellant's age, psychological state and medical condition.
9. His Honour erred in assessing the objective seriousness of the individual offences:
(a) His Honour erred in taking into account that an amount of $13,677,437 was supposedly passed through various accounts that the Appellant controlled when this was not mentioned in the agreed facts in these proceedings nor was there any evidence that this amount related to the proceeding that was the subject of the sentence before His Honour;
(b) His Honour erred in taking into account the Appellant's trustee in bankruptcy's report and particularly the speculation that proceeding were not commenced as a result of a lack of litigation funding;
(c) His Honour erred in finding that the total loss was approximately $1,000,000 when the appellant should have been sentenced on each of the four counts based on the objective criminality of those offences and not on the basis of the total aggregate sum missing.
Each of the offences involved the taking of money by the Applicant from persons on the basis that she would invest the money on their behalf by buying and selling Macquarie and Westpac Bank shares, with the Applicant then failing to do so. Sequence 1 involved an amount of $178,000 from Ross and Ann Gemmell. Sequence 7 involved an amount of $390,000 from Ross and Christopher Martin. Sequence 3 involved the sum of $530,000 from Kathy Gundry and Maree Tisdell. Sequence 4 involved the sum of $461,300 from Antonious Mak.
For completeness I should set out the amounts involved in the other offences taken into account on each of the Forms 1. Sequence 2 involved $171,000, sequence 5 involved $40,000, sequence 6 involved $59,000, sequence 8 involved $35,000, sequence 9 involved $10,000, sequence 10 involved $110,000, sequence 11 involved $69,000, sequence 12 involved $20,000, sequence 13 involved $10,000 and sequence 14 involved $30,000.
Some amounts were returned to each of the investors. However, the overall net result was a loss amongst the victims totalling $1,095,314.
The offences, the subject of the appeal, were committed in the Newcastle area and are separate from other offences (to which reference will be made) committed by the Applicant in the Coffs Harbour area. Although the Court Attendance Notices identified April 2007 to April 2008 as the period during which these Newcastle offences were committed, the Applicant, in her written submissions, said that the Newcastle offences ceased in December 2008.
The scheme
The fraudulent scheme that the Applicant operated was described in the Agreed Facts on Sentence as a Ponzi scam. It involved payment of returns to investors from their own monies or the monies of other investors rather than from any profit gained from the actual investment of the monies obtained by the offender. In many cases, including the present, it involved dealing in cash only.
The details of the Applicant's scheme were contained in the Agreed Statement of Facts. Those facts disclosed the following.
The Applicant used a detailed and fictitious story to assist her in her fraudulent activities. The Applicant explained to the victims that she worked out of the Macquarie Bank Building in Sydney for multi-millionaires, whom she called the 'big boys'. She stated that she invested their money in blocks of $15 million, and bought and sold Macquarie and Westpac Bank shares on their behalf. She stated that she had an investment scheme where the 'big boys' allowed her to combine her and her family's money as well as the money from an additional 25 people into the investment scheme. This scheme was referred to as the 'Macquarie Bank story'.
The Applicant would arrive to meet with victims in a number of vehicles being a blue BMW convertible, which she stated was hers, and a Jeep which she stated a client had bought for her. The Applicant would also be dropped off by her husband John McKittrick in his burgundy BMW. The Applicant explained to victims that she had a safe in the boot of her car which was alarmed and sounded like a rattle snake. She stated that if her car was broken into, the alarm would sound and a phone call was automatically made to the Police and her husband. She stated that from this phone call, she was able to be tracked via satellite. The Applicant further told the victims that she carried a gun in the car and knew how to use it. The Applicant always presented to the victims as well dressed, and she wore a lot of gold jewellery.
Upon meeting with the victims, the Applicant would most often present a document which she would claim as a licence to trade in shares. She would state that the licence had strict guidelines which required her to have an equal amount of money locked in a safety net account which would be used to refund clients if anything happened to her or went wrong with the investment. She stated that her solicitor had the details of all her clients, the amounts held by her on their behalf and that he had instructions to return the clients money if she became unable to work.
The Applicant explained to the victims that she only dealt in cash amounts of $10,000 because cheques took too long to clear. She further said that the victims should not withdraw amounts greater than $10,000 as any amount higher than that were flagged with the banks for investigation. She refused to accept anything but cash.
The Applicant would present receipts to the victims for monies received in the business name of TML Enterprises with addresses of PO BOX 654 Coffs Harbour NSW 2450 and 27 Cowell Street Dora Creek NSW 2264 with mobile phone numbers of 0420476612 and 0401950416. Returns would be paid to the victims in cash and presented to them in plain white envelopes with the date, the amount enclosed and their names hand written on the front by the Applicant. Most of the victims received regular returns for a number of months, on either weekly or fortnightly basis. The Applicant used the illusion of high yielding returns to encourage the victims to invest more money with her.
The Applicant told the victims that their invested money was able to be withdrawn at any time, but she needed three months notice. She further stated that if they needed money for a big purchase, she would arrange a bank cheque for them out of their invested money. The Applicant also encouraged victims to take out loans to cover large purchases as the 'interest' returns they were receiving from their investment would cover their repayments. The victims who complied ended up paying interest on the money they invested with the Applicant and lost. She also encouraged victims to withdraw their superannuation funds, borrow money from family and friends and even sell their properties in order to be able to invest in some of her special, short term schemes with extraordinary returns. As a result, some victims sold their investment properties quickly and below their value so they would have cash to invest with the Applicant.
When victims questioned the Applicant about paying tax on the returns of their investments, the Applicant stated that her company paid the tax on the money and that they didn't have to pay anything. She told victims not to call the money received back as 'interest' and that it was not income. She instead told them to call it an 'interest free investment loan'. The Applicant further offered to accompany victims to their tax agents and explain how the scheme worked for taxation purposes.
The Applicant told victims that the business was originally her father's, and that her mother took it over after he died. She told victims that her mother taught her the trade, that her daughter Rebecca knew the business and would take over from her when she retired.
Upon victims meeting the Applicant and becoming interested in investing, the Applicant would often give them an upfront interest payment without any money being outlaid by them. This tactic was used by the Applicant to entice them into the scheme. If the victims were keen to invest with the Applicant after having the scheme explained to them, but did not immediately have the money to invest, the Applicant told them that she would invest on their behalf and when their money came through they could repay her.
The Applicant told victims that her husband John McKittrick was a retired Highway Patrol Commander, and that his brother Paul was also in the Police Force. She further told them that John's son, Larry, was in charge of Crime Stoppers. The Applicant further explained to victims that her daughter Rebecca worked at the Portugal Resort from where Madeline McCann was abducted.
The Applicant told the victims that she owned a time-share property at Hamilton Island and the Manly Pacific Resort. The Applicant offered for victims to use these time share properties. However, these offers were never fulfilled. The Applicant explained to victims that she had sold her 'big house' on the lake and that they were downsizing, stating the gardener was costing too much and that the tennis court was never used. The Applicant offered victims furniture at no cost that she was removing from her 'big house', thus giving the impression to victims that she was wealthy. On occasions she even purchased presents for some victims and sent Christmas cards enclosing small amounts of money to build their trust in her. Victims who met her personally believed that they became friends with the Applicant.
During the scheme, the Applicant recruited victim Kathy Gundry to act as her go-between with other victims, explaining that she was too busy to see every one face to face. The Applicant enquired with Ms Gundry if she was interested in taking over the business from her, explaining that she was near owning her own $15 million block and when that happened, she would become an investor with the Macquarie Bank not a broker. The victims that deal with the Applicant via Ms Gundry were told by Ms Gundry who the Applicant was and that the Applicant was responsible for their money. Ms Gundry further explained the Applicant's 'Macquarie Bank story'.
On numerous occasions throughout the duration of the scheme, Ms Gundry attempted to give the Applicant some sums of money which she had received from other victims to invest with the Applicant. On these occasions the Applicant told Ms Gundry to use the money collected from the victims to pay them back their interest returns to which they were owed.
Near the end of the scheme, the Applicant told the victims a number of fictitious health-related stories as to why she had not delivered their interest returns. The health-related illnesses she claimed to have were a brain haemorrhage, a stroke, heart problems, a blood clot, high blood pressure and an operation on her shoulder. She further told the victims that her home had been broken into and that she had had been robbed of $500,000 which she had withdrawn in order to pay them their interest returns.
At the time she ran this scheme, the Applicant was being investigated for similar crimes committed in the Coffs Harbour area where she ran a similar Ponzi scam. There was some dispute in the material on the appeal about the dates she operated the scheme in Coffs Harbour. The Agreed Facts before Judge Maiden stated that the Coffs Harbour scheme operated between February 2005 and June 2007. However, the Court Attendance Notices in respect of which she was sentenced by Judge Goldring for the Coffs Harbour offences stipulated periods between May 2003 and June 2007. The Applicant, in her written submissions, accepted that the relevant period was May 2003 to June 2007.
There were 33 offences in connection with the Coffs Harbour scam which involved defrauding victims of approximately 6 million dollars. She was arrested and charged on 5 September 2007 in relation to those offences and was released on bail to appear in Court on 3 October 2007.
In the meantime, in May 2007 the Applicant consulted solicitors about her financial affairs and the possibility of bankruptcy. She then filed her own petition on 13 June 2007 with the result that she went bankrupt on that day. She continued to run the scheme in the Newcastle area whilst bankrupt.
She also continued running this scheme in the Newcastle area whilst on bail for the Coffs Harbour offences. She told some of the victims that they might hear her name being mentioned in the media in relation to some allegations of fraud in Coffs Harbour. She told them her business partner was the one responsible for the fraud and that she had nothing to do with it. She subsequently informed them that her partner took responsibility for these actions and that all allegations against her were being dropped.
The Applicant was sentenced by Judge Goldring in the District Court in Sydney on 28 May 2008 for the Coffs Harbour offences. For each offence she received a two year non-parole period with an additional term of 18 months. Some of the sentences were partially accumulated, resulting in a total effective sentence of a three year non-parole period with an additional term of one year and six months. Her non-parole period expired on 27 May 2012. It was that date that Judge Maiden chose as the date to commence the sentences he imposed.
Subjective matters
The Applicant was born on 26 December 1941. She was, therefore, 65 and 66 at the date of offending, and 70 at the date she was sentenced. She is now aged 72.
Information in various medical and psychological reports show that she had a fairly normal upbringing. She felt academically inferior to her siblings who both were dux at their schools. However, the Applicant achieved above average results academically.
In about 2001 or 2002 she suffered a stroke which gave rise to her coming under the care of Associate Professor Silberberg, a cardiologist. She had a congenital problem in respect of one of the valves to her heart. She has had ongoing hypertension as well as high cholesterol levels. At least since going into custody in 2009 she has suffered from Meniere's Disease. She has mitral valve regurgitation as a result of childhood rheumatic fever. She sufferered from anxiety and depression as well as cognitive impairment. She was also found to have a meningioma in the right posterior cranial fossa in relation to the right internal auditory canal.
Professor Silberberg provided a number of reports including one dated 5 August 2010. His significant conclusions in that report were these:
(1) The Applicant is at significant risk of stroke of the order of 15% per year or higher.
(2) The main contributor to stroke risk is uncontrolled blood pressure, despite compliance with four drug treatments.
(3) This in turn is contributed to by incessant worry for her own wellbeing within the prison population.
(4) Release from custody would alleviate the anxiety state and reduce her stroke risk by about half.
There was a lengthy report from Mr Tim Watson-Munro who diagnosed the Applicant suffering from a substantial Anxiety Disorder and Major Depression. Mr Watson-Munro noted that two failed marriages against a backdrop of psychological abuse and infidelity had a dramatic impact on her. He thought that the confluence of her physical and psychological problems at the time she became involved in the offending made her susceptible to manipulation and exploitation by others. The Agreed Facts on Sentence, however, suggest that she was the person engaged in the manipulation and exploitation.
Grounds of appeal
Because of the disparate nature of the grounds of appeal I have not hitherto referred to the Remarks on Sentence by Judge Maiden. I shall make reference to the relevant parts of those Remarks when dealing with each of the grounds, some of which are grouped for convenience.
Grounds 1, 2 & 3: Special circumstances and the statutory ratio
The Sentencing Judge did not refer to special circumstances. The overall non-parole period is almost 77% of the whole sentence. The non-parole period in respect of Sequence 3 is 80% of the whole sentence. His Honour said nothing in his remarks about these ratios.
Section 44 of the Crimes (Sentencing Procedure) Act1999 (NSW) contains no prohibition or constraint upon setting a balance of the term of a sentence at less than one third of the non-parole period: AB v R [2014] NSWCCA 31 at [46].
In Baghdadi v R [2012] NSWCCA 212 I said (with the concurrence of Macfarlan JA and Johnson J):
[32] This Court has said on a number of occasions that where the effect of accumulating the sentences results in an increase in the statutory ratio a failure of the Sentencing Judge to advert to the matter in his Remarks on Sentence will lead to an inference that the matter has been overlooked: Wakefield v R [2010] NSWCCA 12 at [26]; Arnold v R [2011] NSWCCA 150 at [32]-[33] and Connelly v R [2012] NSWCCA 144 at [32].
However, where it can be seen from the Remarks on Sentence that the final result was precisely what the Sentencing Judge intended, no error will be shown: ABv R at [55] - [57].
Although his Honour did not refer specifically to special circumstances he did make reference to a number of matters which suggest that the ultimate outcome of the sentencing exercise was what his Honour intended to achieve.
First, his Honour thought it was unlikely that she would re-offend. However, he added the rider:
although based upon this matter, one does not know.
He accepted, however, in that context that she would return to live with her husband where his Honour hoped that she would be able to resume living an ordinary life. Those Remarks do not suggest that his Honour considered there was a need for an extended supervision period to assist with the Applicant's rehabilitation. His Honour also noted the good progress that she had made whilst in custody, leading perhaps to the inference that no extended period under supervision would be needed at the expiry of the non-parole period.
Secondly, his Honour had regard to the Applicant's age and state of health. In particular, he said that in circumstances where gaol is to be significantly hard on her because of her age and health he proposed to take that into account. He found that there was no care which she needed which was not available to her through Justice Health. He said that he proposed to take into account her age when dealing with the sentence to be imposed for Sequence 4.
His Honour then imposed fixed terms for Sequences 1 and 7, both of which were wholly subsumed within the sentence for Sequence 3. In relation to Sequence 4 he imposed a non-parole period which was only 57.14% of the total sentence for that Sequence.
His Honour then said that he had accumulated the sentences for Sequences 3 and 4 to reflect the criminality in respect of the Applicant's victims and in doing so he took into account as best he could the subjective matters, particularly her age and medical condition.
In my opinion, the approach his Honour took to the sentencing process indicated fairly clearly that the overall result involving a ratio of almost 77% was what his Honour intended to achieve. Put another way, his Honour did not see any need to vary the statutory ratio overall but in fixing the sentences his Honour had regard to the significant subjective matters of the Applicant's age and health.
In my opinion, no error is shown in relation to these grounds.
Ground 4: Delay
The chronology seems to be this.
May 2003 to June 2007: Offences committed by the Applicant in Coffs Harbour.
April 2007: Applicant commences committing offences in the Newcastle area.
5 September 2007: Applicant charged with the Coffs Harbour offences and is released on bail.
December 2008: Newcastle offences cease.
28 May 2009: The Applicant is sentenced by Judge Goldring in relation to the Coffs Harbour offences. The effective sentence is a non-parole period of three years expiring 27 May 2012 with an additional term of 18 months.
August 2009: Detective Schultz takes Applicant from prison to Silverwater Police Station for interview in relation to the Newcastle offences.
March 2010: After requests by the Applicant's legal representative Detective Oliver confirms that Court Attendance Notices will issue for the Newcastle offences.
9 September 2011: Corrective Services are notified of the Newcastle offences.
21 December 2011: Court Attendance Notices for the Newcastle offences are filed in Maitland Local Court.
6 February 2012: The Applicant appears for the first time in the Local Court in relation to the Newcastle charges.
9 May 2012: The Applicant is committed for sentence to the District Court.
15 June 2012: The Applicant appears in the District Court and adheres to her plea.
19 July 2012: Sentence proceedings commence.
25 July 2012: The Applicant sentenced in respect of the Newcastle offences with a non-parole period to commence 27 May 2012 and expire 26 May 2017.
On the face of it there is lengthy and unexplained delay from August 2009 until December 2011. Although the Applicant was still serving out the sentence ordered by Judge Goldring that does not weaken the principle established in such cases as R v Blanco [1999] NSWCCA 121; (1999) 106 A Crim R 303 at [11] and [16] and R v Todd [1982] 2 NSWLR 517 at 519.
The matter of delay is not unrelated to evidence concerning the Applicant's rehabilitation whilst in prison and the selection by the Sentencing Judge of the expiry of the non-parole period ordered by Judge Goldring as the commencement date for the sentences imposed by the Sentencing Judge.
The only reference made by the Sentencing Judge to delay was this (at ROS 5):
Next matter is that it was submitted that because of the delay in charging her with these matters the authorities having been aware of the matters, probably since at least 2007 and not having been charged until shortly before she was due to enter or to be eligible for parole, that this court should take into account that delay and in some way backdate or take into account those facts. I will deal with that matter later in these Reasons when I consider all matters.
His Honour's only other reference to the matter, somewhat oblique, is that he would backdate the sentence in respect of Sequence 3. In fact, his Honour backdated the sentences for Sequences 1, 7 and 3 to 27 May 2012, the date that her non-parole period expired as ordered by Judge Goldring. It is not clear in those circumstances whether his Honour has taken into account at all the issue of the delay. That is emphasised by the fact that the authorities say that long delay, particularly where unexplained, entitles the offender to a significant element of leniency: R v Todd at 519; Mill v The Queen (1988) 166 CLR 59 at 64-66; and R v Blanco at [11] and [17]. For reasons to be discussed later in this judgment, the sentences imposed could not be regarded as lenient.
The matter is relevant in the Applicant's case for the further reason that in the meantime she had demonstrated some significant advances in rehabilitation by her prison behaviour. His Honour noted that she was a model to other persons in the prison system and had been of great help to them. He also noted the privileges that she had accrued whilst in prison as a result of her behaviour.
It may be accepted that complaints about weight given to matters by a sentencing judge are to be dealt with on appeal if it can be shown there has been an error in discretion of a House v The King (1936) 55 CLR 499 type. In the present case, however, there is no evidence that his Honour had any regard to delay when fixing the sentences. His Honour's only reference to the matter concluded with the statement that he would deal with the matter later in the Reasons when he considered all matters. There is no evidence that his Honour did so. In failing to take account of a material consideration his Honour has fallen into error.
This ground is made out.
Ground 5: Totality
Reference has already been made in relation to Grounds 2 and 3 about the ratio between the non-parole period and the head sentences. If the sentences imposed by Judge Goldring are considered with the present sentences, the ratio produced is an indication that his Honour did not have regard to the principle of totality arising from the prior sentences.
The Crown submitted that the offences committed in Coffs Harbour concerned unrelated offending that occurred and had ceased by the time the present offences commenced. However, the wrongful conduct was the same wrongful conduct. All that had happened was that it was now being conducted in a different geographical location. The methodology employed by the Applicant was the same.
The Sentencing Judge was obliged to take into account the sentence that the Applicant was already serving particularly given that the sentence was being served for identical offending: R v MAK (2006) 167 A Crim R 159 at [15]; Mill at 66-67.
Whilst his Honour made a number of references to the Coffs Harbour matters and whilst he expressly commenced three of the sentences he imposed at the time of the expiry of the non-parole period for the Coffs Harbour matters, there is no indication that his Honour had regard to the totality principle in relation to the sentences imposed by Judge Goldring. The Sentencing Judge not only made the sentences he imposed for the first three Sequences wholly cumulative on the sentence imposed by Judge Goldring he also made the sentence for Sequence 4 wholly cumulative on the sentences for Sequences 1, 7 and 3. The overall result was a non-parole period of eight years with an additional term of 18 months. That produces a ratio of 84.64%.
In my opinion, error is demonstrated by his Honour's failure to advert to the totality principle, to the overall effective sentence that he imposed bearing in mind Judge Goldring's sentences and to the ratio produced. Although, as noted earlier, his Honour appeared to intend the result he achieved for the sentences he imposed, it does not appear that he intended the result when regard is had to Judge Goldring's sentences.
Ground 6: Contrition and remorse
In AB v R RA Hulme J (with whom Beazley JA and Schmidt J agreed) said:
[43] The "weight" to be given to matters such as remorse and rehabilitation prospects is a matter for the discretionary assessment of a sentencing judge and the circumstances in which matters of weight will justify appellate intervention are narrowly confined: R v Baker [2000] NSWCCA 85 at [11] (Spigelman CJ). They fall for assessment under the principles of appellate review of discretionary decision-making set out in House v The King [1936] HCA 40; 55 CLR 499.
The Sentencing Judge found that in respect of her remorse he accepted that the Applicant was now sorry. He also said, as noted earlier, that he accepted that it was unlikely she would re-offend. The Sentencing Judge also noted that the Applicant was a model to other persons in the prison system and had been of great assistance to them.
The Applicant has not demonstrated how his Honour failed to give sufficient weight to these and other matters associated with contrition and remorse. Of course, the inability to demonstrate such a failure serves to emphasise the very discretionary nature of the consideration of these matters. Where the only complaint is that sufficient weight has not been given to a matter, it can be accepted that his Honour has given some weight to the matter. How that reflects itself in the sentence is part of the intuitive synthesis of sentencing.
Error has not been demonstrated in relation to this ground.
Ground 7: The Applicant's medical condition
The Applicant submitted that the Sentencing Judge did not give sufficient weight to Professor Silberberg's opinion about the increased risk of a stroke as a result of her incarceration. The increased risk of stroke was made worse, it was submitted, because Mr Watson-Monroe had diagnosed her with a substantial anxiety disorder and major depression.
It is not suggested that the Sentencing Judge did not take account of her medical condition or the medical opinions. Rather, it is said that not sufficient weight was attached to them.
The Sentencing Judge said this in relation to her health conditions:
The subjective matters also include matters of her health and there is no dispute that in 2001, perhaps 2002, she suffered a stroke which gave rise to her coming under the care of Associate Professor Silverberg, a cardiologist in Newcastle. That condition has resulted in her having to take considerable medications and to be conscious of the risks that she poses, not only to the risk of stroke, but also to heart attack because of a congenital problem in respect of one of the valves to the heart. She has also had other health difficulties, which I will not set out in detail. But suffice to say she has had a diagnosed major depressive and anxiety disorder for some period of time. That condition appears to have worsened prior, in 2008, at a time where she was preparing to be sentenced in respect of what has been described as the Coffs Harbour matters that came before Judge Goldring.
I have read all the reports and the updated reports which have been summarised and a report of a psychologist Tim Watson-Munro, a psychologist who is well known in this court. Mr Watson-Munro has had access to the Justice Health documents that I have also read. The documents from Justice Health indicate that when the offender first came into custody she required considerable medications and it was observed of her that she would need the various pharmaceutical agents to assist her and to keep her in health. That position has not changed.
However, it appears that before custody she was concerned of how she would react in terms of her diagnosed depressive/anxiety disorder and she has, and that has proved to be so and she continues to be medicated in respect of that particular disability. She also has suffered problems with her cholesterol levels and as I have said a valve problem and other matters which have brought her under attention of the Justice Health authorities regularly.
Before the matter came before Judge Goldring, both her cardiologist and psychiatrist, the psychiatrist being Dr Conaris indicated that being in custody would exacerbate her condition. Associate Professor Silverberg stressing that because of the relationship to anxiety and to having what he described as having to have a "good head" that she would suffer a hardship because of those particular problems.There is no doubt that the Professor was correct in his assumptions and she has continued, to suffer in that way. But she has been medicated and to date, fortunately, she has not had any emergency which has caused her or which would be described as life threatening. I note that she does have some surgery that is proposed in respect of some matters which she would like to have done privately.
The opinions of Dr Conaris, Professor Silverberg and Mr Watson-Munro indicate that she would be in better health if she was not in custody and I do not have any difficulty with those observations. However, I will have to deal with that matter later when I come to assessing the subjective matters on behalf of the offender.
...
... In circumstances where that the gaol is to be significantly hard on her because of her age and health, and I propose to take that into account.
In the bottom line of the medical reports it reads that because she is in custody her anxiety depression and therefore its affect in respect of her other medical conditions, particularly her cardiac condition, are exacerbated. That is not to say that she cannot be treated and medicated in hospital, but it is a fact that if released and she was active then her health may improve. However, she has managed to cope adequately in respect of her recent confinement.
I find that there is no care that is not available to her through Justice Health whilst in custody, it may be more comfortable to her whilst not in custody but that does not appear to be the case.
The question of weight is ultimately a matter for the Sentencing Judge. It is clear that he properly considered all of the material in relation to her health.
This ground fails.
Ground 8: Undue weight given to general deterrence
There is no doubt that his Honour emphasised the matter of general deterrence at a number of places in his Remarks on Sentence.
The Applicant submitted that general deterrence is attributed little weight in cases where an offender suffers from a mental condition or abnormality, because such an offender is not an appropriate medium for making an example of: Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 at [53]-[54]. However, the principle has no application in the present case. It is not suggested that these offences were committed as a result of any mental condition or abnormality in the Applicant.
At best, the Applicant's submissions have relevance to the issue of specific deterrence. However, it is not even clear that that is so in the present case. The Applicant suffered from a number of medical conditions prior to any offending. None of those conditions appear to have had any influence in preventing the offending or tempering it. Even after being arrested and charged with the Coffs Harbour offences and being released on bail the Applicant continued to offend.
On the other hand, it may be accepted that by reason of the combination of her medical conditions at the time of sentencing and her age, specific deterrence, whilst still of relevance, might not be of the significance that it would otherwise be.
Whatever may be said about specific deterrence, his Honour was quite correct to emphasise general deterrence. This was a white collar crime and general deterrence is of greater significance: R v Cameron [2005] NSWCCA 357 at [31]; John Michael Higgins v R [2006] NSWCCA 38 at [13]; R v Boulden [2006] NSWSC 1274 at [42] - [43]; R v Kelly [2006] NSWSC 1142 at [59] - [60].
There is no doubt that his Honour took into account the Applicant's age, psychological state and medical condition. How those matters ultimately contributed to the sentence was within the discretion of the Sentencing Judge. No error has been shown in this regard.
Ground 9: Objective seriousness
(a) Taking into account the amount of $13,677,437
The Applicant had also been charged with two counts of obtaining a financial advantage from the Commonwealth and engaging in conduct to obtain a financial advantage from a Commonwealth entity. The fact that those matters were committed in the context of the Coffs Harbour offences and the Newcastle offences for which Judge Maiden was sentencing the Applicant made the material associated with all of the charges relevant for consideration.
His Honour's only reference to this amount was as follows (ROS 7):
Also in respect of the Commonwealth matters there was evidence of considerable amounts of money being passed through various accounts that she had control of or interest in. And the figure that comes to mind was an amount of $13,677,437 found in page 2 of the Statement of Facts tendered at the Toronto Local Court. That document also indicates that there were withdrawals of money between five hundred and $2,000 from various clubs on the eastern coast of New South Wales. There were also significant transactions at various fashion boutiques in Coffs Harbour and it would seem Sydney, as well as resorts and various hotels in Sydney and overseas.
The Applicant submitted that this was an irrelevant consideration to take into account when assessing the objective seriousness of the four counts in respect of which the Sentencing Judge was passing sentence.
It is not apparent from the Remarks that his Honour had regard to that matter for the purpose of assessing the objective seriousness of the individual offences. Rather, it provided some background as associated information which was appropriate to take into account.
(b) The trustee in bankruptcy's report
The Sentencing Judge referred to the fact that the Applicant obtained legal advice and then filed her bankruptcy petition. He noted that in her application she said that her unsecured creditors were just $500,000. His Honour went on to say:
As it transpired the investigation by her trustee in bankruptcy found that initially they were of unsecured amounts in excess of four million and the final figure, in her estate, were in excess of $7.4 million. Those monies I assume related to the Coffs Harbour matters.
A little further on in his Remarks the Sentencing Judge referred to the Applicant's husband giving evidence at the sentencing hearing and to the fact that the Sentencing Judge directed Mr McKittrick's attention to a paragraph in the trustee in bankruptcy's report suggesting that assets purchased by the Applicant had been transferred to him for nil consideration. The Sentencing Judge went on to say:
As I read the balance of the report I infer that the trustee was seeking creditors approval to commence litigation against Mr McKittrick to recover monies that were part of the creditors, or the unsecured creditors amounts. This has not happened for reasons that I do not know, but one inference to be drawn is that the trustee was without funds and would have required either litigation lending referred to in his report or by cash being paid to him by one or other of the other creditors.
The Applicant submitted that his Honour erred in taking into account that the trustee in bankruptcy may or may not have wished to pursue to Mr McKittrick to recover monies.
The Crown rightly pointed to the fact that it was defence counsel who tendered the bankruptcy report and that the Sentencing Judge used the bankruptcy to support a finding that it was unlikely any further money would be repaid.
As with the previous matter, it is not at all evident that this was a matter his Honour took into account in assessing the objective seriousness of the offending. That it was used for other matters is clear when one reads the passage that immediately follows that quoted above where his Honour said:
In any event what the report confirms to me is the unreliability of the offender before me and in respect of what was her intent when she sought to go bankrupt, by seeking solicitor's advice back in May or June of 2007.
Her reliability was of significance before the Sentencing Judge for a number of reasons, not the least of which went to issues of contrition and remorse and to the likelihood of rehabilitation.
(c) The total loss was approximately $1,000,000
The Applicant pointed to five remarks made by the Sentencing Judge where reference was made to the total amount outstanding of something over $1,000,000, and how his Honour dealt with the four counts charged. It was submitted that, contrary to what was said in Pearce v The Queen (1998) 194 CLR 610, his Honour should have imposed an appropriate sentence for each of the four individual offences based on the objective seriousness of those individual offences.
In fact, the last of the remarks objected to was this:
I have accumulated sequences 3 and 4 in that way to reflect your criminality in respect of your victims.
That remark seems to be entirely in accordance with Pearce and other authorities that discuss totality in sentencing.
Two of the sequences took into account a number of matters on two Form 1 documents. It was entirely appropriate, therefore, that his Honour should make reference to the total amount that was outstanding for all of the victims.
One of the passages to which the Applicant took exception was this:
The Form 1 matters are serious in their own right and for that reason I read each of the matters out earlier. And again it brings it again as a second reason into the worst case scenario because of the number of investors and of the amounts not received back by most of them.
The Applicant drew attention to what was said in Abbas, Bodiotis, Taleb and Amoun v R [2013] NSWCCA 115 at [22] by Bathurst CJ:
The existence of these additional offences may demonstrate the greater need for personal deterrence and retribution in respect of the offence charged. This does not mean the court is imposing a separate penalty for the Form 1 offences. Rather, as part of the instinctive synthesis approach to sentencing explained by McHugh J in Markarian v R HCA 25; (2005) 228 CLR 357 at [51]-[54], it takes these matters into account as required by the statute in determining the appropriate penalty for the offence for which the offender is convicted.
There is no indication in the passage in the Remarks referred to that his Honour was doing other than was referred to in Abbas or by McHugh J in Markarian v R [2005] HCA 25; (2005) 228 CLR 357.
The assessment of objective seriousness is ultimately one for the sentencing judge. It is not demonstrated that any of the passages referred to were used or misused by the Sentencing Judge in assessing objective seriousness. The matters in those Remarks were relevant to a number of considerations in the sentencing process.
No error is shown in relation to this ground.
Re-sentence
The two areas where error has been demonstrated are both significant matters in terms of sentence. It is convenient to consider the sentences and the totality principle first. As noted, the overall result of the sentences imposed by Judge Goldring and Judge Maiden was a non-parole period of eight years with an additional term of 18 months. The sentences imposed by Judge Maiden were discounted by 25% for the early plea. The notional starting point for his sentences was, therefore, 8.66 years. If that is added to the three year non-parole period that the Applicant served as a result of Judge Goldring's sentence before commencing to serve the present sentences the notional starting point for all offences was 11.66 years. If there was no variation to the statutory ratio that would produce an undiscounted non-parole period of 8.7 years.
Even without considering the discount that ought to have been given because of the delay, that is a severe sentence even having regard to the amounts of money involved in the scams.
Further, the notional starting point for the sentences actually imposed by Judge Maiden of 8.66 years must be regarded as near the top of the range bearing in mind the Applicant's age and health issues. That sentence does not take into account the discount that ought to have been given for the long delays in charging the Applicant for the offences committed in the Newcastle area.
In my opinion, the Applicant should be re-sentenced in relation to Sequences 3 and 4 as follows, with no alteration being made to the two fixed terms for sequences 1 and 7, which have now expired.
·Sequence 3, taking into account three matters on the Form 1, imprisonment for a non-parole period of 2 years and 6 months to commence 27 May 2012 and expiring 26 November 2014 with a balance of term of 1 year 3 months expiring 26 February 2016.
·Sequence 4, taking into account seven matters on the Form 1, imprisonment for a non-parole period of 2 years to commence 27 May 2014 and expiring 26 May 2016 with an additional term of 1 year 6 months expiring 26 November 2017.
In that regard, I would find special circumstances by reason of the Applicant's age and serious health conditions.
Conclusion
I propose the following orders:
(1)1. Grant leave to appeal;
(2)2. Appeal allowed;
(3)3. Quash the sentences imposed by Judge Maiden in respect of Sequences 3 and 4;
(4)4. In lieu, sentence the Appellant as follows:
(a)(a) Sequence 3, taking into account three matters on the Form 1, imprisonment for a non-parole period of 2 years and 6 months to commence 27 May 2012 and expiring 26 November 2014 with a balance of term of 1 year 3 months expiring 26 February 2016.
(b)(b) Sequence 4, taking into account seven matters on the Form 1, imprisonment for a non-parole period of 2 years to commence 27 May 2014 and expiring 26 May 2016 with an additional term of 1 year 6 months expiring 26 November 2017.
ADAMSON J: I have read in draft the judgments of Simpson and Davies JJ. I respectfully adopt the comprehensive statement of facts contained in Davies J's draft. I agree with Simpson and Davies JJ for the reasons their Honours have given that grounds 1 to 3, 6, 7, 8 and 9 have not been made out. Grounds 4 and 5 remain to be considered.
Ground 4: delay
Delay is a relevant consideration. The Sentencing Judge specifically referred to delay in the remarks on sentence in the passage set out by Davies J. I consider that this reference is sufficient to indicate that his Honour did take into account delay. Although his Honour foreshadowed that he would "deal with that matter later" in the reasons, I do not understand his Honour to be saying other than that the delay would be taken into account when fixing the sentences for individual offences and the total sentence. For the reasons given by Simpson J I agree that it was open to the Sentencing Judge to take into account delay but not to reduce the total sentence accordingly. The approach taken by the Sentencing Judge does not, in my view, reveal error.
Accordingly I am not persuaded that this ground has been made out.
Ground 5: totality
As appears from the judgments of Simpson and Davies JJ, the combined total sentence imposed on the Applicant, when one takes account of the sentences imposed by Judge Maiden and Judge Goldring, was a non-parole period of eight years with an additional term of 18 months. The ratio produced is 84.21%.
Simpson J considers, for the reasons her Honour has given, that it is appropriate to restructure the sentence so as to leave the combined total term intact but to reduce the non-parole period by a year so as to reflect the statutory ratio provided for in s 44(2) of the Crimes (Sentencing Procedure) Act. The effect of her Honour's approach is that the non-parole period will expire on 26 May 2016 and the balance of the term will expire on 26 November 2018.
Davies J considers, for the reasons his Honour has given, that it is appropriate to find special circumstances and restructure the sentence so as to reduce by a year both the total non-parole period (such that it expires on 26 May 2016) and the total length of term (such that it expires on 26 November 2017) by a year.
Notwithstanding Davies J's careful consideration of the relevant facts and circumstances, I am not satisfied that this Court, in re-sentencing the Applicant, ought find special circumstances.
The statutory prohibition in s 44(2) of the Crimes (Sentencing Procedure) Act 1999 (NSW) on structuring a sentence such that the ratio is smaller than the statutory ratio unless special circumstances are found requires reasons to be given for any such finding. There is no requirement for reasons to be given when the ratio between the non-parole period and the total term exceeds the statutory ratio. However where reasons are not given for the excess, there is at least an implication that the Sentencing Judge has not appreciated the mathematical effect of two sentences on the overall ratio. I am satisfied that this is what has occurred in the instant case.
I agree for the reasons given by Simpson J that ground 5 has been made out and that the Applicant ought be re-sentenced. I agree with the orders that her Honour has proposed.
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