Nicholls v The Queen
[2016] VSCA 300
•30 November 2016
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCR 2016 0007
| ANTHONY JOHN NICHOLLS | Applicant |
| v | |
| THE QUEEN | Respondent |
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| JUDGES: | REDLICH and McLEISH JJA and BEALE AJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 11 October 2016 |
| DATE OF JUDGMENT: | 30 November 2016 |
| MEDIUM NEUTRAL CITATION: | [2016] VSCA 300 |
| JUDGMENT APPEALED FROM: | DPP (Cth) v Nicholls (Unreported, County Court of Victoria, Judge Patrick, 6 November 2015) |
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CRIMINAL LAW – Appeal – Sentence – Dishonest use of position as director with intention of gaining advantage (3 counts) – Guilty plea – Sentenced to total effective sentence of 4 years and 6 months, release ordered under Crimes Act 1914 (Cth) s 20(1)(b) after serving 3 years, by recognizance of $2000, to be of good behaviour for 18 months – Manifest excess – Sentence manifestly excessive in light of guilty plea, applicant’s age, good prospects of rehabilitation and delay in sentencing – R v Donald [2013] NSWCCA 238; DPP (Cth) v Northcote (2014) 99 ACSR 1, considered – Appeal allowed – Resentenced to total effective sentence of 3 years and 6 months with non-parole period of 2 years and 6 months.
CRIMINAL LAW – Appeal – Sentence – Whether judge provided discount for utilitarian benefit of guilty plea – Discount provided in circumstances – DPP (Cth) v Thomas [2016] VSCA 237, applied.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr A J Palmer | Stary Norton Halphen |
| For the Crown | Mr D D Gurvich QC | Mr M Pedley, Solicitor for Public Prosecutions (Cth) |
REDLICH JA
McLEISH JA
BEALE AJA:
On 7 May 2015 the applicant, who was then aged 63, pleaded guilty to three charges of using his position as a director dishonestly with the intention of gaining an advantage contrary to s 184(2)(a) of the Corporations Act 2001 (Cth) (‘Corporations Act’). Following a plea hearing, he was sentenced on 6 November 2015 as follows:
Charge on Indictment Offence Maximum Sentence Cumulation 1 Corporations Act s 184(2)(a) 5 years’ imprisonment or 2000 penalty units 2 years 9 months (commences 6 May 2018) 2 Corporations Act s 184(2)(a) 5 years’ imprisonment or 2000 penalty units 2 years 6 months 9 months (commences 6 February 2017) 3 Corporations Act s 184(2)(a) 5 years’ imprisonment or 2000 penalty units 3 years Base (commences 6 November 2015) Total Effective Sentence: 4 years 6 months Pre-sentence Detention Declared: 134 days 6AAA Statement: 6 years with a non-parole period of 4 years Other orders: Release ordered under s 20(1)(b) of the Crimes Act 1914 (Cth) after serving 3 years, by recognizance of $2000, to comply with the condition to be of good behaviour for 18 months. Circumstances of the offending
The applicant was a director of Zantholls International Pty Ltd (‘Zantholls’) and Peton Properties Ltd (‘Peton’). Zantholls was his private company. Peton was jointly owned with an associate of the applicant, Peter Gerard Scully. The applicant and Scully used both companies to raise funds from investors in relation to two proposed property developments in Ballarat.
Between 2004 and 2006, approximately $4 million in funds were raised, including by way of loan agreements for terms of six or 12 months under which Zantholls and Peton were to pay interest of 50 per cent per annum. Some of the funds which were raised were paid into the trust account of Antunes Lawyers (‘Antunes’), a law firm based in Sydney which acted for the companies involved in the proposed developments. Other funds were paid into an account operated by Peton.
Investors paid $1,406,000 directly into the Antunes trust account. Of that amount, $391,100 was transferred by or at the direction of the applicant into a bank account operated by Zantholls. The applicant used that money for personal expenses.
Investors also deposited $1,693,500 directly into the Peton account. Of that amount, $365,808.31 was transferred by or at the direction of the applicant either into the Zantholls account or otherwise disbursed, in either event for the personal use and expenses of the applicant.
The total amount involved in the offending was $756,908.31. Charge 1 concerned the authorisation by the applicant of two withdrawals of investment funds totalling $136,000 from the Antunes trust account between 7 and 15 October 2004. Charge 2 concerned the authorisation by the applicant of six withdrawals totalling $255,100 from the trust account between 25 October 2004 and 10 August 2005. Charge 3 related to the authorisation by the applicant of 39 withdrawals totalling $365,808.31 from the Peton account between 31 May 2005 and 15 August 2006.
The proposed property developments did not proceed. The companies were unable to pay the interest promised or to repay the money invested. In October 2007 a liquidator was appointed to Peton. The preliminary report of the liquidator indicated that Peton had no realisable assets and that it had incurred liabilities totalling $1,466,733.55. Ultimately, the liquidator lodged a report with the Australian Securities and Investments Commission stating that Peton had a net deficit of over $4 million.
The applicant was charged in December 2012. He was committed for trial on 25 February 2014. The matter was listed for trial in May 2015 but was resolved by the applicant’s plea which was foreshadowed late in April 2015.
At the plea hearing, counsel for the applicant relied on an extensive written submission which proceeded by reference to the sentencing considerations set out in s 16A of the Crimes Act 1914 (Cth) (‘Crimes Act’). Counsel referred to the fact that the applicant was 63 years old and had no prior convictions. His businesses had been liquidated and he had been made bankrupt. He and his family had been the subject of sustained and often unlawful pressure and anger from investors and others as a result of the failure of the developments. Counsel accepted that the amounts withdrawn by the applicant were of a level and frequency that effectively stymied Peton’s chances of being successful. However, it had not been suggested that the scheme had been fraudulent from its inception. At the same time, counsel conceded that some period of imprisonment needed to be served.
The applicant’s counsel pointed out that, as part of his bankruptcy, the applicant had lost his house and motor vehicles. The bankruptcy and the hostile actions of third parties had a significant effect on his children, especially his daughter. The conduct of some of those who had suffered financial loss due to the failure of the developments was described by counsel as ‘extra-curial punishment’.
It was submitted that until the offending the applicant had been known as a hardworking, honest and reputable man. There was said to be very considerable utilitarian benefit as a result of his plea of guilty, especially in light of the fact that there had originally been 55 charges on the indictment. The judge indicated during the plea hearing that there had been great utilitarian benefit in the plea of guilty.
Finally, counsel relied on the length of time which had elapsed between the investigation, of which the applicant became aware in 2009 or 2010, and sentencing.
The judge was provided with details of what were said to be sentences for comparable offending. Counsel for the applicant submitted that it was apparent that very heavy sentences were reserved for those cases where substantial amounts of money had been taken over substantial periods of time, where the breaches of trust were ‘spectacular’ and the offenders had pleaded not guilty.
In sentencing, the judge described the offending as serious. While blame for the failure of the business was to be shared with Scully, it was the applicant who had withdrawn the money in question on a regular basis over a considerable period of time to support himself and his family. This constituted ‘a very significant breach of trust’.[1]
[1]DPP (Cth) v Nicholls (Unreported, County Court of Victoria, Judge Patrick, 6 November 2015) [20] (‘Reasons’).
The judge viewed the withdrawals as ‘multiple nails in the coffin of an already terminally ill business’.[2] She referred to the financial and emotional pain suffered by the investors and stated that she considered the offending ‘to be towards the higher end of this type of offending’.[3]
[2]Ibid [21].
[3]Ibid.
The judge stated that general deterrence was a very important consideration in this kind of offending. Considering also the need for denunciation and just punishment, and the objective seriousness of the offending, an immediate term of imprisonment was the only appropriate sentence.[4] The judge concluded that the applicant’s prospects of rehabilitation were good and that re-offending was unlikely. She gave specific deterrence reduced weight accordingly.[5]
[4]Ibid [22].
[5]Ibid [23]–[24].
The judge found that the applicant had suffered ‘a degree of extra-curial punishment’.[6] The disqualification from managing a company which was a consequence of his conviction was also to be taken into account in terms of its punitive effect, given the applicant’s background in business. The judge also took into account the delay in sentencing.[7]
[6]Ibid [29].
[7]Ibid [31].
The judge indicated that the plea of guilty was late ‘but indicates some willingness to facilitate the course of justice’. She stated that, while the plea of guilty was an expression of remorse, that remorse was limited due to the lateness of the plea. She took into account that the applicant had expressed his regret to others for the losses suffered by the victims of the offending.
Finally, the judge stated that she had borne in mind that the maximum penalty for each offence was five years’ imprisonment, rather than the 10-year maximum penalty applicable to dishonesty offences such as theft or obtaining property by deception. She stated that the maximum penalty available had ‘constrained the length of sentences to be imposed’.[8] The judge said that it was important to reflect the criminality involved in each charge, in light of the maximum penalty available. Individual sentences, rather than an aggregate sentence, were required to achieve that objective.[9]
[8]Ibid [34].
[9]Ibid.
The proposed grounds of appeal are as follows:
1.The individual sentences imposed on each of charges 1, 2 and 3, the orders for cumulation, the total effective sentence and the recognisance release order were all manifestly excessive.
2.The sentencing judge erred by not providing sufficient discount for the plea of guilty. In particular, her Honour erred by not taking into account the utilitarian benefit of the plea of guilty and, as a consequence, not providing sufficient discount in the sentence for the plea of guilty.
3.The sentencing judge erred by finding that the offending was ‘towards the higher end of this type of offending’.
Ground 2
Counsel for the applicant commenced his submissions by relying on proposed ground 2. He submitted that the judge had failed to afford the applicant the utilitarian benefit flowing from his plea of guilty. It was submitted that the focus of the Crown submissions at the plea hearing had been on the discount to be applied by reference to subjective factors, in particular the willingness of the applicant to facilitate the course of justice, and that the sentencing judge had, consistently with those submissions, allowed for a discount based on those factors but had left out of account the different consideration based on the objective factor, namely the utilitarian benefit consisting of the avoidance of a trial which flowed from the plea of guilty. It was submitted that it was also evident from the reliance of the sentencing judge on the lateness of the plea that she had based the discount on subjective factors, to which lateness was relevant, rather than the objective factor.
Counsel for the respondent submitted that the sentencing judge had taken both subjective and objective factors into account in deciding what value to attribute to the plea of guilty. The judge had indicated during the plea hearing that she considered the utilitarian benefit to be significant. The defence submissions had drawn attention to both subjective and objective factors. Moreover, the ‘willingness’ to facilitate the course of justice referred to by the judge was said to embrace the utilitarian benefit in any event.
Finally, counsel for the respondent submitted that it was evident that the judge took account of the utilitarian value of the plea. The lateness of the plea meant that the primary basis for any discount was necessarily the utilitarian benefit resulting from the plea. Especially in that circumstance, the judge’s failure expressly to mention the utilitarian benefit did not justify the conclusion that it had been ignored. Counsel cited Phillips v The Queen[10] for the proposition that it was unnecessary and undesirable for a sentencing judge to separate the elements of the discount to be given following a plea of guilty into objective and subjective elements.
[10](2012) 37 VR 594, 616 [73] (Redlich JA and Curtain AJA; Maxwell P agreeing) (‘Phillips’).
The day before oral argument in the present matter, the Court handed down judgment in DPP (Cth) v Thomas.[11] It was held in Thomas that a court sentencing for a Commonwealth offence is required by s 16A(2)(g) of the Crimes Act to take account of the utilitarian benefit of a plea of guilty. The saving of the need for a trial and for the giving of evidence by victims of the offending reflects the ‘objective’ benefit derived from a plea of guilty. As described in Thomas, the other basis for the discount for a plea of guilty is that the plea manifests the offender’s willingness to facilitate the course of justice. That attracts a discount by reference to the subjective circumstances of the offender, which may intersect with considerations of remorse. Ordinarily, there will be no material difference between the discount to be allowed for a plea of guilty on either basis, but it is important that the utilitarian benefit be adequately reflected.[12]
[11][2016] VSCA 237 (‘Thomas’).
[12]Ibid [5], [7], [29]–[30], [144]–[149] (Redlich, Santamaria and McLeish JJA).
As noted above, the respondent correctly observed that this Court held in Phillips that ‘it will not usually be necessary for the sentencing judge to distinguish in the sentencing remarks between the objective and subjective criteria unless it has been concluded that something less than the full discount should be allowed for one or both criteria’.[13] In the relevant passage, Redlich JA and Curtain AJA went on to say:[14]
Where it is concluded that the discount that would usually be allowed should be moderated or disregarded, that finding and the reasons therefore [sic] should be disclosed. Where circumstances permit the strength of the Crown case to be taken into account, some distinction between the subjective and objective criteria will usually be desirable to demonstrate that any reduction in the discount has been properly confined to the subjective criteria.
[13]Phillips (2012) 37 VR 594, 616 [73]; see also at 620 [92] (Harper JA).
[14]Ibid 616 [73] (citations omitted).
In Thomas, it was said that there may be cases where a willingness to facilitate the course of justice is unable to be drawn from the plea of guilty, or where the subjective circumstances of the offender may not afford a basis for giving the same discount as would be warranted when regard is had to the utilitarian benefit.[15] It was also confirmed, as Phillips indicates, that the strength of the Crown case may bear on the discount to be afforded by reference to subjective criteria.[16] In other words, it may be possible to infer from the strength of the Crown case that subjective criteria played little or no role in the decision to plead guilty.[17] However, the strength of the Crown case, or its weakness, cannot affect the discount for utilitarian benefit.[18] Here, again, distinct regard must be had to the utilitarian benefit of the plea.
[15][2016] VSCA 237 [5], [29], [70], [149].
[16]Ibid [5].
[17]Phillips (2012) 37 VR 594, 614 [70].
[18]Ibid 612–13 [64]–[65].
The judge in the present matter did not advert in her sentencing remarks to the utilitarian benefit of the applicant’s plea of guilty. The applicant sought to infer from this omission, and the judge’s reliance on the lateness of the plea, that the judge had overlooked the utilitarian benefit of the plea when evaluating the discount it should attract. As part of this submission, it was contended that the lateness of the plea bore far more heavily on the subjective aspect of the plea than on its objective value.
At the plea hearing, the applicant urged upon the sentencing judge that his plea had facilitated the course of justice. He had saved the community the cost and inconvenience of a lengthy and complex trial and spared the victims from having to give evidence. The judge expressed her sentencing remarks by reference to the applicant having ‘some willingness to facilitate the course of justice’.[19] She expressly inferred from the lateness of the plea, as the Crown had urged her to do, that the applicant’s remorse was ‘limited’.[20] Although the respondent submitted in this Court that the lateness of a plea also bore on the objective benefit derived from that plea, the judge did not indicate that she was reducing the discount for the plea by reason of its lateness on any basis other than the limited extent of remorse which it demonstrated.
[19]Reasons [32].
[20]Ibid.
The reasons in Thomas, as already noted, indicate that there will generally not be a difference in the discount to be applied for a plea of guilty, whether that discount is described as reflecting the willingness of the offender to facilitate the course of justice, or as reflecting that willingness together with the utilitarian benefit derived from the plea. For that reason, it is not generally necessary, as discussed above, for sentencing judges to differentiate between those formulations. The applicant has not demonstrated that the fact that the judge used the language of facilitating the course of justice reveals that she did not allow the applicant a discount to which he was entitled by reason of the utilitarian benefit of his plea. There was no particular feature of the case, including the lateness of the plea, that meant that the application of the subjective and objective criteria should yield a different result. Moreover, the judge indicated during the plea hearing that the plea had great utilitarian benefit. It is apparent in all the circumstances that the applicant was not denied any sentencing discount to which he was entitled by reference to that utilitarian benefit alone.
For these reasons, proposed ground 2 should be rejected.
Grounds 1 and 3
The remaining proposed grounds were argued together, under the rubric of manifest excess. To establish the ground of manifest excess the applicant must show that something has gone obviously, plainly or badly wrong. The sentence imposed must be wholly outside the range of sentencing options available.[21]
[21]See, eg, Clarkson v The Queen (2011) 32 VR 361, 384 [89] (Maxwell ACJ, Nettle, Neave, Redlich and Harper JJA); Binse v The Queen [2016] VSCA 145 [57] (Whelan, Beach and McLeish JJA).
The applicant contended that, when regard was had to the s 6AAA statement, it emerged that, but for the plea of guilty, the applicant would have been sentenced on count 3 to four years’ imprisonment. Such a sentence invited immediate scrutiny.[22]
[22]Wong v The Queen [2013] VSCA 52 [26] (Priest JA; Tate JA and Vickery AJA agreeing).
The applicant made reference to the cases which had been relied upon by the Crown and the defence at the plea hearing and submitted that they indicated that the sentence that had been imposed was outside the range available, given the offending and the circumstances of mitigation which had been relied upon.
Counsel for the respondent observed that the three charges involved 47 instances of offending. He submitted that the offending involved a high degree of moral culpability and significant breaches of trust. The sentencing judge had taken account of all the matters advanced by way of mitigation. It was correct to characterise the offending as being toward the higher end, having regard to the amount involved, the duration of the offending and the fact that the money taken had been used for the applicant’s personal expenses. The offences charged had involved intentional, rather than reckless, conduct. The comparable cases were said to be of limited utility, but a factual similarity was said to exist between the applicant’s offending and that in R v Sellers,[23] in which offending over a period of 2 years and 5 months in a total amount of $441,000 led to a sentence of 4 years’ imprisonment on 16 counts with a non-parole period of 2 years, after full admissions and an early plea.
[23]Unreported, County Court of Victoria, Judge Dyett, 23 August 2007.
The argument under grounds 1 and 3 proceeded substantially by reference to cases which were said to be comparable to the present. It is convenient to repeat what this Court said in Thomas as to the use of comparable cases:[24]
[24][2016] VSCA 237 [174]–[176].
French CJ, Keane and Nettle JJ stated in R vPham[25] that comparable cases served a twofold purpose: the first, that such decisions ‘provide guidance as to the identification and application of relevant sentencing principles’; the second, to decide whether they yield ‘discernible sentencing patterns and possibly a range of sentences against which to examine a proposed or impugned sentence’.[26] Bell and Gageler JJ were to further observe in Pham that the ‘reasonable consistency’ to which the joint reasons in Hili refer is consistency with respect to sentencing outcomes.[27]
[25](2015) 325 ALR 400 (‘Pham’).
[26]Ibid 405 [26].
[27]Ibid 410 [46]. See also Pham v The Queen [2016] VSCA 259.
These observations were summarised in the recent decision of this Court in Nguyen v The Queen,[28] where Redlich JA (with whom Tate and Whelan JJA relevantly agreed), referring to the two purposes stated in Pham, said:[29]
[28][2016] VSCA 198 (‘Nam Son Nguyen’).
[29]Ibid [69] (citations omitted).
These purposes advance the requirement of reasonable consistency. They advance the underlying value of equality under the law and the search for unifying principles. By the requirement that a discretionary decision must be made in conformity with well settled principles, the law promotes consistency in decision making and diminishes the risk of arbitrary and capricious adjudication.
Every sentence is of course the product of the intuitive synthesis of all factors relevant to the particular case, including the circumstances of the offender and the offence, and the aggravating and mitigating features. For that reason it is sometimes emphasised that sentences passed in other cases are not precedents which must be followed unless they are capable of being distinguished.[30] But that said, past sentences do provide guidance to sentencing judges, and to appellate courts. As the joint judgment stated in Hili, Barbaro v The Queen[31] and Pham, those comparable cases, whilst not marking the outer bounds of the sentencing discretion, may well establish a range of sentences which have been imposed.[32]
[30]See, eg, DPP v Zhuang [2015] VSCA 96 [30] (Redlich, Priest and Beach JJA).
[31](2014) 253 CLR 58.
[32]Nam Son Nguyen [2016] VSCA 198 [71] (Redlich JA).
The High Court has said that consistency in sentencing for federal offenders is to be achieved through the work of intermediate appellate courts.[33]
[33]Hili (2010) 242 CLR 520, 537–8 [56] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ); Pham (2015) 325 ALR 400, 405–6 [27], 406 [28(3)].
As already mentioned, the sentencing judge was referred to a number of cases said to be comparable to the present. On the hearing of the application for leave to appeal, this Court was taken to the same cases.[34] It is not necessary to set out the details of those cases. Many of them involved sentencing for offences against s 184(2)(a) of the Corporations Act along with other offending. Some concerned dishonesty offences for which a maximum sentence of 10 years’ imprisonment applied. Several were sentencing decisions at first instance. A number revealed a variety of mitigating circumstances personal to the particular offenders.
[34]R v Street (Unreported, Victorian Court of Appeal, Winneke P, 13 May 2005); R v Phillips (Unreported, County Court of Victoria, Judge Dyett, 23 August 2007); R v Sellers (Unreported, County Court of Victoria, Judge Dyett, 23 August 2007); R v Leech (Unreported, County Court of Victoria, Judge Millane, 1 November 2007); Fasciale v The Queen(2010) 30 VR 643; Krecichwost v The Queen (2012) 88 ACSR 339; DPP (Cth) v Weerappah (Unreported, County Court of Victoria, Judge Meredith, 6 August 2013); DPP (Cth) v Letten [2014] VCC 1285.
The respondent rightly submitted that it is difficult to identify a sentencing range for offending such as the present because of the range of offending which can be encompassed within s 184(2)(a). The cases to which the Court’s attention was drawn bear this out. The features most readily comparable are the amount of the advantage derived from the dishonest use of the offender’s position in the corporation and the period over which the offending conduct occurred. But that is at best a rough guide. Each offence will involve multiple other variables, including the nature of the dishonesty and the particular dishonest use of position that took place, and mitigating features including personal circumstances of the offenders and whether there was a plea of guilty. As indicated, the search for consistency is further complicated by the presence of different or additional charges. The Court’s further searches have revealed a limited number of decisions, which do not provide the kind of yardstick which may be derived from comparable sentencing cases in the manner explained by the High Court.[35]
[35]See R v Watt [2005] NSWCCA 89; R v Daswani (2005) 53 ACSR 675; DPP (Cth) v Gaw [2006] VSCA 51; R v Donald [2013] NSWCCA 238; Tokley v Holmes [2014] SASC 101; DPP (Cth) v Northcote (2014) 99 ACSR 1.
However, it is useful to refer by way of illustration to two relatively recent decisions of the NSW Court of Criminal Appeal which have some similar features to the present case. Both were Director’s appeals in which the appeal was allowed and the sentence increased. The first is R v Donald,[36] in which the respondent pleaded guilty to an offence under s 184(2) of the Corporations Act. He was sentenced to a term of two and a half years’ imprisonment but was released forthwith upon entering a recognizance to be of good behaviour for two years. The charge was a ‘rolled up’ count, which represented the respondent's offending over two and a half years during which he engaged in 30 separate transactions that resulted in an advantage to him amounting to $1,782,000. The Crown did not challenge the length of the sentence, but argued that its suspension failed to adequately reflect the gravity of the offence. Latham J, with whom Hidden and Adamson JJ agreed, agreed with the sentencing judge that the gravity of the offending was ‘moderately high’. She concluded that the representative nature of the charge and the inherent leniency in a suspended sentence demonstrated that the sentence failed to reflect the gravity of the offence and failed in particular to serve as an effective deterrent.[37] A sentence of two years’ imprisonment was imposed together with an order that the respondent be released after serving 12 months of that sentence.[38]
[36][2013] NSWCCA 238 (‘Donald’).
[37]Ibid [84].
[38]Ibid [89].
The second decision is Director of Public Prosecutions (Cth) v Northcote.[39] The respondent pleaded guilty to an offence against s 184(2) of the Corporations Act and to two other offences of making a false and misleading statement contrary to s 1308(2). The principal offence against s 184(2) involved ‘a high level of seriousness’ in which the respondent personally profited by over $1 million from a premeditated course of conduct over a lengthy period.[40] A total effective sentence of two years’ imprisonment, to be served by way of intensive correction in the community, was imposed. On appeal, Garling J, with whom Hoeben CJ at CL and R S Hulme AJ agreed, found that the sentence of two years to be served by intensive correction order was manifestly inadequate because it did not reflect the seriousness of the principal offence, which was at the higher end of the range, the extent to which the respondent personally was financially advantaged by the offence, the need for general deterrence and the need to impose a sentence which punished the respondent and denounced his criminal conduct.[41] The respondent was re-sentenced to 3 years and 6 months’ imprisonment, of which he was required to serve 2 years before his release upon a recognizance. Garling J further observed that, but for the principle of double jeopardy that was applicable in that case, a longer period in custody was plainly appropriate.[42]
[39](2014) 99 ACSR 1 (‘Northcote’).
[40]Ibid 16–17 [120]–[121].
[41]Ibid 15 [104].
[42]Ibid 17 [128].
In assessing the claim that the present sentences are manifestly excessive, the following observations of this Court in Director of Public Prosecutions (Cth) v Gregory[43] concerning white collar crimes are pertinent:[44]
In seeking to ensure that proportionate sentences are imposed, the courts have consistently emphasised that general deterrence is a particularly significant sentencing consideration in white collar crime and that good character cannot be given undue significance as a mitigating factor, and plays a lesser part in the sentencing process. … 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.
…
… Whilst not directly arising in this case, there is a tendency to place a disproportionate emphasis on a dollar value concept of the loss. The results are sometimes a lack of deterrence and proportionality. Professor Freiberg has noted that the personal circumstances of the white collar criminal appear to weigh heavily in the judge’s mind at the expense of justice in the abstract, or the effect on or interest of the victim(s), and that this persistent sentencing phenomenon is spread across jurisdictions. Charles JA in Director of Public Prosecutions v Bulfin adverted to this serious risk in sentencing white collar criminals, stating that:
… the consequences of discovery and punishment and the havoc that a custodial sentence usually wreaks on the lives of the white collar criminal and his or her family, may have a tendency to distract attention from the importance that general deterrence ought to carry in the imposition of sentences …
[43](2011) 34 VR 1 (‘Gregory’).
[44]Ibid 16 [53]–[55] (citations omitted) (Warren CJ, Redlich JA and Ross AJA).
When considering sentences for crimes of dishonesty by those discharging duties under the Corporations Act, it is necessary to be mindful of the relative ease with which persons occupying positions of control and responsibility can gain very substantial financial advantages if they resort to dishonest means, and the likely harm done to multiple victims from such offending conduct. As Justice McClellan of the NSW Supreme Court said, speaking extra-judicially:[45]
When assessing the seriousness of a crime involving violence to an individual, the extent of the harm occasioned to the victim is a significant matter. The sentence may vary depending upon the nature and extent of the injuries inflicted on the victim. White-collar crime also impacts upon victims, sometimes many, but usually lacks any physical violence. Although mostly confined to a loss of money, that loss may have a devastating consequence for the wellbeing of the individual. Identifying and weighing the harm may prove difficult.
[45]Justice Peter McClellan, ‘White Collar Crime: Perpetrators and Penalties’ (Keynote Address, Fraud and Corruption in Government Seminar, University of New South Wales, 24 November 2011) 18.
The applicant submitted that, especially when regard is had to the s 6AAA statement in this matter, it is apparent that the judge sentenced the applicant on the basis that his offending was very close to the most serious of its kind. But for the plea of guilty, it was submitted, the base sentence would have been four years for offending punishable by a maximum sentence of five years. Reference was made to Wong v The Queen,[46] where Priest JA (with Tate JA and Vickery AJA agreeing) said that the fact that a judge had imposed a sentence of more than 50 per cent of the maximum penalty ‘might invite scrutiny’. That decision does not suggest that there is any rule of thumb by which doubt is cast on a sentence above a particular level. As Priest JA went on to say, scrutiny may particularly be warranted where, for example, the offending in question is not a bad example of the offence. In other words, a higher sentence will attract scrutiny to ascertain whether the severity of the sentence is proportionate to the nature of the offending, taking into account all other relevant sentencing considerations including the maximum penalty of five years.
[46][2013] VSCA 52 [26].
It is not necessary to test the present sentences on the scenario which would have arisen had the applicant not pleaded guilty. Reliance on s 6AAA statements for that purpose is undesirable because of the inherent artificiality in the requirement that s 6AAA imposes, namely that sentencing judges revisit sentences which are the product of an instinctive synthesis and then remove one element of that synthesis (the plea of guilty).[47] The point remains that the sentences in this matter were all set at 40–60 per cent of the maximum penalty.
[47]Scerri v The Queen (2010) 206 A Crim R 1, 6 [23] (Maxwell P and Buchanan JA).
The significance of the maximum penalty was explained in the joint reasons in Markarian v The Queen in these terms:[48]
[48](2006) 228 CLR 357, 372 [30]–[31] (citations omitted) (Gleeson CJ, Gummow, Hayne and Callinan JJ) (‘Markarian’).
Legislatures do not enact maximum available sentences as mere formalities. Judges need sentencing yardsticks. It is well accepted that the maximum sentence available may in some cases be a matter of great relevance. In their book Sentencing, Stockdale and Devlin observe that:
A maximum sentence fixed by Parliament may have little relevance in a given case, either because it was fixed at a very high level in the last century … or because it has more recently been set at a high catch-all level … At other times the maximum may be highly relevant and sometimes may create real difficulties …
A change in a maximum sentence by Parliament will sometimes be helpful [where it is thought that the Parliament regarded the previous penalties as inadequate].
It follows that careful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick.
The offending in the present matter was doubtless serious. The total amount of the benefit dishonestly obtained was in the order of $750,000 and the overall offending lasted nearly two years. But it is necessary to commence by considering the sentence of three years’ imprisonment imposed on the base offence.
The judge understandably treated the most serious offence as charge 3, which involved 39 withdrawals between 31 May 2005 and 15 August 2006 in the total amount of $365,808.31. The amount involved is significant and the offending persisted over a considerable period. The judge described the applicant’s conduct, which involved multiple breaches of the trust investors had placed in him, as being ‘towards the higher [end]’ of this kind of offending.[49] On the other hand, all offending against s 184(2)(a) is by definition intentionally dishonest. Where it warrants an immediate term of imprisonment it will be likely to involve the dishonest gain of a substantial financial advantage. But the maximum penalty remains five years’ imprisonment. The decisions of Donald and Northcote show that the amount involved in this case is by no means the highest that the courts have encountered or that may be encompassed by this offence. Accordingly, even if the judge was right to describe the offending as being ‘towards the higher [end]’, it could not properly be said to be at or near the higher end.
[49]Reasons [21].
Even taking account of this Court’s observations in Gregory quoted earlier, when regard is also had to the plea of guilty and the mitigating considerations including the applicant’s age, his good prospects of rehabilitation, the delay in sentencing, the sentence imposed on charge 3 is shown to be manifestly excessive, as is the total effective sentence. The applicant should be resentenced to imprisonment for 2 years and 6 months on charge 3. Six months of each of the sentences on charges 1 and 2 should be served cumulatively on the sentence for charge 3, producing a total effective sentence of 3 years and 6 months. A non-parole period of 2 years and 6 months should be fixed.[50]
[50]See Crimes Act 1914 (Cth) s 19AB, as inserted by Crimes Legislation Amendment (Powers, Offences and Other Measures) Act 2015 (Cth) sch 7 item 10. Section 19AB applies to federal sentences imposed on or after its date of commencement, being 27 November 2015: Crimes Legislation Amendment (Powers, Offences and Other Measures) Act 2015 (Cth) sch 7 item 16.
We wish to make this additional observation. The assessment of the objective gravity of offending for this offence is necessarily informed and circumscribed in a significant way by the maximum penalty as explained in the passage from Markarian referred to above. It is a matter for the legislature to consider whether sentencing courts should have greater flexibility to impose more substantial sentences for serious breaches of duty involving dishonesty by company directors.
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