Northe v The King

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCR 2023 0192

RUSSELL JOHN NORTHE	Applicant
v
THE KING	Respondent

---

JUDGES:	PRIEST and McLEISH JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	19 June 2024
DATE OF JUDGMENT:	27 June 2024
MEDIUM NEUTRAL CITATION:	[2024] VSCA 145
JUDGMENT APPEALED FROM:	[2023] VCC 1889 (Judge McInerney)

---

CRIMINAL LAW – Application for leave to appeal – Sentence – Two charges of misconduct in public office – Total effective sentence 1 year and 9 months – Non-parole period 1 year – Member of parliament made false claims in respect of administrative expenses – Second Verdins principle applicable – Sentencing judge determined that community correction order insufficiently punitive – Whether second Verdins principle required sentencing judge not to impose term of imprisonment – Second Verdins principle not requiring term of imprisonment not to be imposed in any particular case – Verdins did not require sentence of imprisonment not to be imposed – Leave to appeal refused.

CRIMINAL LAW – Whether sentencing judge assumed applicant would be granted parole contrary to Sentencing Act 1991 s 5(2AA)(a) – Sentencing judge’s reference to parole did not relate to consideration of how long applicant would spend in custody – No contravention of Sentencing Act 1991 s 5(2AA)(a) – Leave to appeal refused.

CRIMINAL LAW – Whether sentence manifestly excessive – Whether community correction order should have been imposed – Sentence reflects full impact of mitigating considerations – No error in imposing term of imprisonment – Leave to appeal refused.

Crimes Act 1958 s 320; Electoral Act 2002 pt 12 div 1C; Sentencing Act 1991 s 5(2AA)(a).

Verdins v The Queen (2007) 16 VR 269; R v Vardouniotis (2007) 171 A Crim R 227, considered. Hutchinson v The Queen (2015) 71 MVR 8, referred to.

---

Counsel
Applicant:		Mr PJ Smallwood with Mr C Tom
Respondent:		Ms EH Ruddle KC
Solicitors
Applicant:	Tyler Tipping & Woods
Respondent:	Ms A Hogan, Solicitor for Public Prosecutions

PRIEST JA
MCLEISH JA:

The applicant was a member of the Legislative Assembly from 2006 to 2022, representing the electoral district of Morwell. On 27 September 2023, he pleaded guilty to two charges of misconduct in public office, an offence under the common law to which a maximum penalty of 10 years’ imprisonment applies.0F[1] He was sentenced to a total effective sentence of 1 year and 9 months’ imprisonment, with a non-parole period of 1 year, and now seeks leave to appeal that sentence.
[1]Crimes Act 1958, s 320.
The offending involved the making of false claims in respect of administrative expenses.
Division 1C of pt 12 of the Electoral Act 2002 provides for administrative expenditure funding to be paid to eligible registered political parties with parliamentary representation and elected members who are not members of a registered party. The funding is to be used to pay ‘claimable expenditure’, which includes expenditure for the administration or management of the activities of the eligible party or elected member.1F[2] Independent elected members are eligible to receive up to $200,000 annually (subject to pro rate adjustment), which is payable quarterly in advance.2F[3]
[2]Electoral Act2002, s 207G.
[3]Ibid s 207GA.
Within 16 weeks after the end of each calendar year, the registered agent of an independent elected member must provide an administrative expenditure funding return to the Victorian Electoral Commission (‘the Commission’) specifying that the member has incurred claimable expenditure not less than the amount of the entitlement to administrative expenditure funding, or less than that amount (specifying the difference).3F[4] The return must be accompanied by a declaration by the registered agent of the independent elected member that he or she has no reason to believe that any matter stated in the return is not correct.4F[5]
[4]Ibid s 207GC.
[5]Ibid s 207GC(2).
The return must be provided to the Commission along with a certificate of a registered company auditor advising that the statement has been audited in accordance with Australian Accounting Standards.5F[6] The certificate must state that the auditor was given full and free access to all accounts, records, documents and papers relating to any matter required to be specified in the return, that the auditor examined such material and received all information and explanations the auditor requested, and that the auditor has no reason to believe that any matter stated in the return is not correct.6F[7]
[6]Ibid s 207GD(2).
[7]Ibid s 207GD(3).
Any amount of administrative expenditure funding in excess of claimable expenditure in any calendar year must be deducted from the subsequent payment of funding or repaid to the Commission.7F[8]
[8]Ibid s 207GF(2).
The applicant became eligible for administrative expenditure funding on 25 November 2018, following his election on 24 November 2018.
The applicant received funding of $20,273.97 for 2018 and $201,785.74 for 2019.
On 17 April 2019, Ms Joanne Loh, a registered company auditor, sent the applicant a signed 2018 calendar year audit certificate based on the information provided to her by the applicant.
On 17 April 2019, the applicant submitted his 2018 return to the Commission and, in his capacity as registered agent, signed an attestation dated 16 April 2019 certifying that the information contained within the return was true and complete to the best of his knowledge. The return stated that the applicant had paid a total of $22,662.40 in administrative expenditure, which exceeded the $20,273.97 paid to him by way of administrative expenditure funding for the 2018 calendar year. Accordingly, he was not liable to repay any of that funding.
The claimed expenditure of $22,662.40 was said to have been comprised of $19,562.40 for wages for an administrative assistant and $3,100 for a bond or deposit for an office.
The applicant provided Ms Loh with a Workforce XS document and a receipt dated 17 December 2018 from Vance Marcollo, respectively, in support of the claimed expenditures. He provided a redacted bank statement as evidence of payment.
In fact, Workforce XS never provided an administrative assistant to the applicant and never received a payment of $19,562.40 from him. While Mr Marcollo did lease office space to the applicant, the lease did not commence until 1 March 2019 and he did not receive a payment of $3,100 on 17 December 2018 as stated in the return.
On 20 April 2020, the applicant submitted a return in respect of the 2019 calendar year, together with an audit certificate. He claimed a total gross administrative expenditure of $170,201 for the 2019 calendar year.
On 20 April 2020, Ms Loh sent the applicant a signed audit certificate based on an audit of the information he had provided to her.
The claim for $170,201 comprised:
(a)expenditure in the amounts of $40,359, $43,373 and $43,373 respectively, totalling $127,105, for two staff supplied by Workforce XS;
(b)commercial rent of $37,200 paid to Mr Marcollo at a monthly rate of $3,100; and
(c)expenditure on a printer acquired from Chris Humphrey Office National (‘Chris Humphrey’) for $5,896.
The applicant supplied the following documents to Ms Loh in connection with the claimed expenditure:
(a)a quote from Workforce XS for provision of two staff;
(b)a lease agreement and an invoice for $37,200 purportedly signed by Mr Marcollo as ‘paid in full’;
(c)an invoice for a printer from Chris Humphrey dated 30 March 2019; and
(d)bank account statements showing the three payments to Workforce XS, eleven payments to Mr Marcollo reflecting the monthly rent of $3,100 for 12 months and payment of $5,896 to Chris Humphrey, all in 2019.
In fact:
(a)Workforce XS had only provided $1,409.60 worth of professional services to the applicant since 2018, and had not provided the quote which the applicant supplied to Ms Loh;
(b)Mr Marcollo leased premises to the applicant for $1,550 per month, and the schedule to the lease had been altered after he signed it, without his knowledge. The applicant paid $17,050 for rent in 2019 but claimed $37,200.
(c)The business records of Chris Humphrey showed the printer was invoiced on 30 March 2020 and paid for on 1 April 2020.
On the basis of the claimed expenditure, the applicant was to repay $31,749.71 to the Commission. Of the total claimed expenditure of $170,201, a total amount of $153,151 was false. The amount that ought to have been repaid was therefore $184,900.71.
The total amount of the false claims over the two years was $173,424.97.
The charges alleged that the applicant wilfully misconducted himself in public office by:
(a)reporting false administrative expenditure to the Commission on his 2018 and 2019 returns; and
(b)provided annual audit certificates based on false information supplied by him to the auditor preparing his 2018 and 2019 audit certificates.
In respect of the first charge, the applicant was sentenced to 10 months’ imprisonment. He was sentenced to 1 year and 6 months’ imprisonment on the second charge. Three months of the first sentence were ordered to be served cumulatively upon the second sentence, making a total effective sentence of 1 year and 9 months’ imprisonment. A non-parole period of 1 year was fixed.8F[9]
[9]DPP v Northe [2023] VCC 1889 [66]–[68] (Judge McInerney) (‘Sentencing Remarks’). Under s 6AAA of the Sentencing Act 1991 (‘Sentencing Act’), the judge declared that, if not for the applicant’s plea of guilty, he would have imposed a total effective sentence of 3 years’ imprisonment with a non-parole period of 1 year and 10 months: at [69].
The applicant seeks leave to appeal on the following grounds:
1.There was an error arising from the sentencing judge having not applied the second of the propositions considered in R v Verdins (2007) 16 VR 269.
Particulars:
The evidence before the sentencing court:
a)Established that imprisonment would serve to reinforce the applicant’s very significant negative cognitions about himself and the offending which would be a potent factor in his mental state deteriorating substantially and to a point from which it would be very difficult for him to recover.
b)Enlivened the second Verdins proposition. That proposition was however not applied.
2.There was an error arising from the sentencing judge having assumed that the applicant would be admitted to parole.
3.The sentence first imposed was manifestly excessive because the wrong type of sentence was imposed.
Particulars:
a)A community correction order, or a relatively short period of imprisonment followed by a community correction order, would have achieved all of the applicable sentencing purposes.

Sentencing remarks

The judge found that the applicant’s criminality was ‘sophisticated, protracted and brazen’.9F[10] The offending was complex, in each instance involving the preparation by the applicant of false invoices and false bank statements with entries supporting expenditures that were never made. It also involved the applicant forwarding those documents to an auditor in order to deceive her into providing the required audit certificates, and forwarding false documents to the Commission in order to justify funding for expenditure which had not in fact taken place.10F[11]
[10]Ibid [8].
[11]Ibid [9].
By way of background to the offending, the judge found that the applicant had been a hard-working and excellent member of parliament. He had, however, become socially isolated and found it difficult to handle his role as a husband, father, member of parliament and Minister. His work became more difficult as a result, in particular, of the Morwell pit fire in 2009 and bushfires in 2019. The judge found that the applicant’s social isolation led to him abusing alcohol, which escalated as a problem from 2015, and to a gambling addiction. The applicant also made inappropriate investment decisions and lost significant funds as a result.11F[12]
[12]Ibid [18]–[19].
The judge found that the applicant had been encountering mental health issues prior to an attempted suicide in February 2021 as a result of the threatened publication of his criminal activity. The applicant had encountered issues with depression on three previous occasions and was prescribed antidepressant medication in 2017, which he did not take. In an attempt to overcome isolation and stress, the applicant visited gaming venues and engaged in various gambling activities, incurring debts of approximately $400,000. In 2019, over 3,000 bets produced a net loss to Tabcorp of $180,841.42. In addition, the applicant placed over 1,000 bets with Ladbrokes, resulting in losses of $42,500.12F[13]
[13]Ibid [20]–[22].
The judge noted that the mental health history of the applicant was not said to diminish his culpability, but was relevant to understanding the background to his criminal conduct. Since 2021, the applicant had successfully controlled his alcohol and gambling addictions. He was, however, diagnosed in February 2021 with a major depressive disorder with anxiety, and alcohol disorder in remission. He was admitted to hospital at that time, and again in October 2022, with a diagnosis of bipolar disorder and depressive state. The applicant remained under treatment from a psychologist.13F[14]
[14]Ibid [26]–[29], [32].
Relying on expert evidence as to the mental health condition of the applicant, the judge accepted that principles 5 and 6 in Verdins v The Queen (‘Verdins’) were applicable.14F[15] In other words, a sentence of imprisonment would weigh more heavily on the applicant than a person in normal health and imprisonment would have a significant adverse effect on the applicant’s mental health. The judge recorded a submission that, in light of the mental health condition of the applicant, principle 2 of Verdins was also applicable. In other words, the appropriate sentence was said to be one that included a community correction order.15F[16]
[15](2007) 16 VR 269 [32] (Maxwell P, Buchanan and Vincent JJA).
[16]Sentencing Remarks [40]–[41].
The judge accepted that the applicant’s guilty plea was an early one with utilitarian benefit. It had facilitated the course of justice and demonstrated the remorse of the applicant. In addition, the applicant had shown genuine remorse for his criminal actions independently of his plea. The judge accepted that the principles of Worboyes v The Queen16F[17] were applicable, so as to enhance the utilitarian effect of the plea in light of the lingering effect on court lists of the COVID-19 pandemic.17F[18]
[17](2021) 96 MVR 344, 356–7 [39] (Priest, Kaye and T Forrest JJA); [2021] VSCA 169.
[18]Sentencing Remarks [42].
The judge referred to the applicant’s personal and successful work history, his prior character and personal qualities and success in business and as a member of parliament, the expansive acknowledgment of his good character by various referees attesting to his community service, and the universal opinion of the character referees as to the applicant’s deep remorse.18F[19]
[19]Ibid [25].
The judge also noted that three and a half years had elapsed since the offending and, through no fault of the applicant, nearly three years had elapsed after the execution of a warrant in November 2020 until sentencing in October 2023. The judge took into account that, during that period, the matter had been hanging over the head of the applicant, and that during that period he had effected rehabilitation in relation to his gambling and drinking addictions, expressed genuine remorse and admitted his guilt.19F[20]
[20]Ibid [43].
The judge also accepted that, as a result of the offences, the applicant had been subjected to personal humiliation and public opprobrium. To the extent that this had contributed to his depression, and his feelings of shame and the impact on his employability, the judge accepted that this represented extra-curial punishment which was to be taken into account by way of mitigation of the sentence.20F[21]
[21]Ibid [44]–[45].
The judge concluded by explaining that the balancing process required in this instance had been ‘exceptionally demanding’.21F[22] Having regard to the gravity of the offending, however, he had decided that the only appropriate sentence, making full allowance for the principle of parsimony, was one of imprisonment involving a head sentence and a non-parole period.22F[23] The judge then addressed the possibility of a community correction order, in the following terms:
In regard to my conclusion, I note that, during the hearing, the prosecution submitted that a combined sentence was within range and, indeed, you had a positive report from Community Corrections ... In so far as a community correction order is concerned, I think that the words of Priest JA in Hutchinson v R are apposite:
Acknowledging that a CCO might be appropriate ‘even in cases of relatively serious offences which might previously have attracted a medium term of imprisonment’, it should not be thought that Boulton offers a ‘Get Out of Jail Free card’ in situations where a sentence of imprisonment is necessary in a given case to satisfy the various purposes for which a sentence may be imposed. One of the purposes for which a sentence may be imposed is, of course ‘to punish the offender to an extent and in a manner which is just in all of the circumstances’. There will be cases — indeed many cases — where, having regard to the seriousness of the offending, a CCO will be insufficiently punitive to satisfy the need to punish the offender in a manner which, in all of the circumstances, is just. At the risk of again traversing well-trodden ground, it is axiomatic that in every case the sentence imposed must depend on its own facts, including the circumstances of the offending and the offender, and the circumstances of aggravation and mitigation.
My assessment of your skills and abilities is that, once you have served your sentence and been admitted to parole, you will be able to adapt to your new life. I see no need for supervision. My assessment of you, based upon the strong character evidence presented to this Court, is that you will soon obtain appropriate employment and resume your voluntary community contributions without any compunction.
As I have said, once you have served your sentence, I am sure you will continue to effect rehabilitation and not be likely to offend again.23F[24]
[22]Ibid [53].
[23]Ibid [61].
[24]Ibid [63]–[65] (citations omitted).
In the course of the sentencing remarks, the judge also referred to a number of cases involving misconduct in public office, noting that each related to their own circumstances and facts. He also referred to sentencing statistics that had been provided.24F[25]
[25]Ibid [47]–[51], [62].

Ground 1 — Verdins limb 2

By the first proposed ground of appeal, the applicant submits that the judge erred by failing to apply the second principle in Verdins. It is submitted that a term of imprisonment was not an appropriate disposition in this case, by virtue of the potentially devastating risk that prison posed to the mental health of the applicant. The applicant points out that the judge acknowledged the applicability of the fifth and sixth Verdins principles to the sentencing task, but says that the second principle meant that the appropriate disposition was a community correction order. He relies on observations of Maxwell P in R v Vardouniotis in support of the submission. 25F[26]
[26](2007) 171 A Crim R 227, 236 [33] (‘Vardouniotis’); [2007] VSCA 62.

This submission is misconceived. The judge recognised the applicability of the second Verdins principle. That principle recognises that impaired mental functioning may have a bearing on the kind of sentence that it imposed and the conditions in which it should be served. This is, in effect, an amplification of the other Verdins principles. It recognises that the mitigating effect of impaired mental functioning may extend to the kind of sentence that is imposed, and not only the length of a term of imprisonment.
The principle does not, however, insist that a term of imprisonment not be imposed in any particular case. It requires the sentencing judge to take account of that possibility, by reference to the facts and circumstances of the matter before the court.
In the present case, the judge did this. He noted the submission that had been made on behalf of the applicant, to the effect that the second principle in Verdins was applicable, and that a community correction order would be an appropriate sentence. But he did not accept that the principle required that result in this case. The judge accepted that the consequences of a sentence of imprisonment were ‘of powerful mitigation’ and that the hardship the applicant would experience in prison in respect of his mental health was also a very weighty factor in mitigation.26F[27] But ultimately, the judge said that the only appropriate sentence was one of imprisonment, making full allowance for the principle of parsimony, and that ‘no other sentence would be appropriate’.27F[28] Citing Hutchinson,28F[29] the judge regarded a community correction order as insufficiently punitive in all the circumstances. He also saw ‘no need for supervision’.29F[30]
[27]Sentencing Remarks [56].
[28]Ibid [61].
[29]Hutchinson v The Queen (2015) 71 MVR 8; [2015] VSCA 115.
[30]Sentencing Remarks [63]-[64].
In other words, the judge considered that Verdins did not require him not to impose a term of imprisonment in this case. His approach to that issue was correct. The applicant’s reliance on Vardouniotis does not assist. In the passage relied on, Maxwell P was doing no more than applying the predecessor of the second Verdins principle30F[31] to the facts of that particular case.
[31]Namely, the ‘second Tsiaras principle’: R v Tsiaras [1996] 1 VR 398, 400 (Charles, Callaway JJA and Vincent AJA).
Leave to appeal must be refused in respect of the first proposed ground.

Ground 2 — parole

The applicant submits, under the second proposed ground of appeal, that the judge assumed that the applicant would be granted parole, contrary to s 5(2AA)(a) of the Sentencing Act 1991. That provision prohibits a court from having regard to any possibility or likelihood that the length of time actually spent in custody by the offender will be affected by executive action of any kind. The granting of parole is the most obvious form of executive action contemplated by the provision.31F[32]
[32]Crump v New South Wales (2012) 247 CLR 1, 17 [28], 19 [36] (French CJ), 26 [59] (Gummow, Hayne, Crennan, Kiefel and Bell JJ), 29 [72] (Heydon J); Minogue v Victoria (2019) 268 CLR 1, 17 [17] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ), 21 [32] (Gageler J), 22 [38] (Edelman J).
The submission fastens on the judge’s reference to parole in [64] of the sentencing remarks.32F[33] But the judge was not there adverting to the possibility or likelihood that the time spent by the applicant in custody would be affected by a grant of parole. He was merely saying that, once the applicant is released from prison, he would be able to adapt and continue to effect his rehabilitation. That conclusion had nothing to do with the question whether parole was granted. It would apply from whatever point the applicant was released from prison, and the reference to parole simply indicates that this might occur upon a grant of parole. The judge made no assumption regarding the granting of parole.33F[34]
[33]See [33] above.
[34]Cf Mackay v The Queen [2015] VSCA 125.
The second proposed ground is without substance.

Ground 3 — manifest excess

The third and final proposed ground asserts that the sentence was manifestly excessive and that a community correction order ought to have been imposed.
The question is whether the sentence imposed was wholly outside the range of sentencing options available to the judge.34F[35] The applicant must show that something must have gone obviously, plainly or badly wrong in the exercise of the sentencing discretion.35F[36] An allegation of manifest excess is a challenge to the exercise of a discretion which does not depend on specific error, as articulated in House v The King.36F[37]
[35]R v Abbott (2007) 170 A Crim R 306, 309–10 [13]–[15] (Maxwell P, Eames JA agreeing at 312 [22], Habersberger AJA agreeing at 312 [23]); [2007] VSCA 32.
[36]Ayol v The Queen [2014] VSCA 151 [30] (Maxwell P), citing Clarkson v The Queen (2011) 32 VR 361, 384 [89] (Maxwell ACJ, Nettle, Neave, Redlich and Harper JJA).
[37](1936) 55 CLR 499, 504–5 (Dixon, Evatt and McTiernan JJ). See Markarian v The Queen (2005) 228 CLR 357, 370–1 [25] (Gleeson CJ, Gummow, Hayne and Callinan JJ); Hili (2010) 242 CLR 520, 538 [58] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).
The applicant submitted that the sentence contravened the following provisions of s 5 of the Sentencing Act enshrining the principle of parsimony:
(3) … a court must not impose a sentence that is more severe than that which is necessary to achieve the purpose or purposes for which the sentence is imposed.
(4) … a court must not impose a sentence that involves the confinement of the offender unless it considers that the purpose or purposes for which the sentence is imposed cannot be achieved by a sentence that does not involve the confinement of the offender.
…
(4C) … a court must not impose a sentence that involves the confinement of the offender unless it considers that the purpose or purposes for which the sentence is imposed cannot be achieved by a community correction order to which one or more of the conditions referred to in sections 48F, 48G, 48H, 48I and 48J are attached.
Reliance on these provisions does not assist the argument regarding manifest excess. It is not submitted that the judge did not take these principles into account. Nor could it be. He expressly referred to the principle of parsimony.37F[38] The argument is that the judge ought to have reached a different conclusion in applying the law to the facts of the case. But since the sentencing exercise is discretionary in character, it will not suffice simply for this Court to decide whether it would have reached a different conclusion. Sentencing error must be established in accordance with House v The King. Here, the error is said to lie in the sentence being manifestly excessive, attracting the principles set out above.
[38]Sentencing Remarks [46], [61].
We are unable to accept that the sentence imposed in this case was manifestly excessive. We accept that the mental health condition of the applicant, which we have chosen not to elaborate upon at any length in these reasons, was a very powerful mitigating factor in the sentencing exercise. The applicant’s remorse and full acceptance of responsibility for his offending also tell strongly in his favour, and there is strong evidence of the applicant’s previous good character and his substantial service to the community. There are other significant matters in addition, as referred to by the sentencing judge.
But it cannot be gainsaid that this was a very serious example of misconduct in public office. It involved deliberate and brazen fraudulent conduct of some sophistication, undertaken over a protracted period, by which the applicant dishonestly appropriated some $173,000 of public revenue. The offending profoundly breached the trust which the community places in members of parliament, and the trust of the electors of the district of Morwell in particular. The maximum penalty for the offence, which may take a range of forms, is 10 years’ imprisonment. In all the circumstances, the sentence of 1 year and 9 months reflects the full impact of the mitigating considerations upon which the applicant could rely.
Far from being manifestly excessive, the sentence reflects the very careful attention given by the judge to a particularly challenging sentencing task. Leave to appeal must be refused on this ground accordingly.

Conclusion

Leave to appeal is refused.
---

[2024] VSCA 145

27 June 2024