Peter Daniels Clarke Ii v Commonwealth Director of Public Prosecutions
[2012] ACTCA 7
•16 February 2012
PETER DANIELS CLARKE II v COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS [2012] ACTCA 7 (16 February 2012)
CRIMINAL LAW – appeal against sentence – error in applying totality principle – total sentence manifestly excessive – differences in circumstances of offences and of appellant and co-offender – parity principle does not require new sentences to be strictly comparable to those imposed on co-offender – no principle that use of misappropriated money for business purposes is less culpable than personal use of misappropriated money – appeal upheld and appellant resentenced.
AB v The Queen (1999) 198 CLR 111
Lowe v The Queen (1984) 154 CLR 606
Pearce v The Queen (1998) 194 CLR 610
R v Elvin [1997] ACTSC 1
Steer & Ors v The Queen [2000] FCA 462
ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
No. ACTCA 12 - 2011
No. SCC 146 of 1999
Judges: Penfold, Burns and Lander JJ
Court of Appeal of the Australian Capital Territory
Date: 16 February 2012
IN THE SUPREME COURT OF THE ) No. ACTCA 12 - 2011
) No. SCC 146 of 1999
AUSTRALIAN CAPITAL TERRITORY )
)
COURT OF APPEAL )
ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:PETER DANIELS CLARKE II
Appellant
AND:COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS
Respondent
ORDER
Judges: Penfold, Burns and Lander JJ
Date: 16 February 2012
Place: Canberra
THE COURT ORDERS THAT:
The appeal be allowed.
The sentences imposed by Gallop J be set aside.
The appellant be resentenced as follows:
a) Count 1 18 months imprisonment commencing 3 April 2009;
b) Count 2 2 years imprisonment commencing 3 October 2010;
c) Count 3 18 months imprisonment concurrent with the sentence imposed on Count 1;
d) Count 4 3 years and 6 months imprisonment commencing 3 October 2012;
e) Count 5 3 years and 6 months imprisonment concurrent with the sentence imposed on Count 4.
A period of 5 years is fixed, commencing 3 April 2009 and expiring 2 April 2014, during which the appellant is not eligible for parole.
IN THE SUPREME COURT OF THE ) No. ACTCA 12 - 2011
) No. SCC 146 of 1999
AUSTRALIAN CAPITAL TERRITORY )
)
COURT OF APPEAL )
ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:PETER DANIELS CLARKE II
Appellant
AND:COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS
Respondent
Judges: Penfold, Burns and Lander JJ
Date: 16 February 2012
Place: Canberra
REASONS FOR JUDGMENT
THE COURT:
The appellant appeals from sentences imposed by Gallop J on 1 April 2011. The appellant had earlier entered pleas of guilty to five counts on an indictment dated 27 January 2000. Those counts were:
COUNT 1...THAT PETER CLARKE on or about 24 September 1992, being an officer of a corporation, namely Burns Philp Trustee Company (Canberra) Limited (“the Corporation”), in relevant circumstances, made improper use of his position as such an officer to gain, directly or indirectly, an advantage for himself, or another person, in that, with intent to defraud clients of the Corporation, he caused, or permitted the transfer from the Corporation’s trust account at Citibank, Sydney to New Zealand of about AUD122,400.00 belonging to the clients of the Corporation.
COUNT 2AND FURTHER THAT between about 7 April 1993 and about 7 June 1993, he committed an offence against subsection 1317FA(1) of the Corporations Law, in that he, knowingly, or intentionally, and intending to defraud clients of Burns Philp Trustee Company (Canberra) Limited (“the Corporation”), contravened a civil penalty provision, namely subsection 232(6) of the Corporations Law, in that he being an officer of the Corporation, in relevant circumstances, made improper use of his position as such an officer to gain, directly or indirectly, an advantage for himself or another person, in that he caused or permitted, the transfer from the Corporation’s Trust Account and disbursement of about AUD427,776.98 belonging to the said clients.
COUNT 3AND FURTHER THAT on or about 7 June 1993, he committed an offence against subsection 1317FA(1) of the Corporations Law, in that he, knowingly, or intentionally, and intending to defraud clients of Burns Philp Trustee Company (Canberra) Limited, contravened a civil penalty provision, namely subsection 232(6) of the Corporations Law, in that he being an officer of the Corporation, in relevant circumstances, made improper use of his position as such an officer to gain, directly or indirectly, an advantage for himself or another person, in that he caused or permitted, the transfer of about USD81,000.00 belonging to clients of the Corporation from an account in the Corporation’s name at the First Interstate Bank of California, Los Angeles (Account Number 149453514), to an account in the name of Clarke Daniels & Company Limited at the ASB Bank, Auckland, New Zealand.
COUNT 4AND FURTHER THAT between about 6 September 1993 and about 8 September 1993, he committed an offence against subsection 1317FA(1) of the Corporations Law, in that he, knowingly, or intentionally, and intending to defraud clients of Burns Philp Trustee Company (Canberra) Limited (“the Corporation”), namely the beneficiaries of the MacCormick Trusts, contravened a civil penalty provision, namely subsection 232(6) of the Corporations Law, in that he being an officer of the Corporation, in relevant circumstances, made improper use of his position as such an officer to gain, directly or indirectly, an advantage for himself, or another person, in that he caused, or permitted, the drawing down of loan funds of about AUD3,427,513.10 against the security of share certificates and unit certificates belonging to clients of the Corporation, namely beneficiaries of the MacCormick Trusts.
COUNT 5AND FURTHER THAT between about 6 September 1993 and about 9 December 1993 he committed an offence against subsection 1317FA(1) of the Corporations Law, in that he, knowingly, or intentionally and intending to defraud clients of Burns Philp Trustee Company (Canberra) Limited (“the Corporation”), namely beneficiaries of the MacCormick Trusts, contravened a civil penalty provision, namely subsection 232(6) of the Corporations Law, in that he being an officer of the Corporation, in relevant circumstances, made improper use of his position as such an officer to gain, directly or indirectly, an advantage for himself, or another person, in that he caused the transfer and disbursement of AUD3,427,513.10, being the proceeds of the loan funds particularised in Count 4.
Each of the offences carries a maximum term of imprisonment of five years. On each count the learned sentencing Judge sentenced the appellant to three years imprisonment. His Honour ordered that each of the terms of imprisonment were to be served consecutively with the exception that the sentence imposed on Count 4 was to be concurrent with the sentence imposed on Count 3. The effect of the sentences imposed was that the appellant was liable to serve twelve years imprisonment commencing 3 April 2009. The commencement date of the aggregate sentence was backdated to 3 April 2009 to allow for periods the appellant spent in custody prior to sentence. The commencement date of the aggregate sentence is not challenged in the present appeal. A period of seven years commencing 3 April 2009 was fixed, during which the appellant would not be eligible for parole.
The background facts are set out in detail in paragraphs [1] to [16] of the Reasons for Sentence delivered by the learned sentencing Judge on 1 April 2011. For present purposes it is sufficient to state that between 24 September 1992 and 9 December 1993 the appellant took advantage of his position as the controlling officer of Burns Philp Trustee Company (Canberra) Limited to misappropriate about $4.1 million of trust funds belonging to clients of the company. He applied the misappropriated funds for his own personal gain, to keep the company afloat and to fund attempts to establish a financial services business under his control. There was no clear evidence as to the loss ultimately suffered by the clients of the company, but it appears to have been in excess of $4 million.
The appellant’s co-offender was sentenced in 1999. The appellant, who had been on bail for some time, failed to appear at his original sentencing hearing scheduled for 26 June 2000, having apparently left Australia shortly before that. His appearance for sentence in 2011 followed his extradition from Germany.
THE APPEAL
The grounds of appeal are:
(a) That the sentence imposed by the Learned Judge is manifestly excessive;
(b) That the Learned Judge failed to appropriately apply the principles of totality;
(c) That the Learned Judge failed to appropriately apply the principles of parity;
(d) That the Learned Judge, in assessing culpability, failed to distinguish between the different usages to which the funds the subject of each count were put;
(e) That the Learned Judge erred at law when making the sentences on Counts 1, 2, 3 and 5 fully consecutive by:
(i) failing to consider the close connection and overlapping criminality between the counts; and
(ii) failing to disclose the reasons why the sentences should not be concurrent.
We will not dwell upon the written or oral submissions of counsel for the appellant in support of these grounds. It is unnecessary to do so. The Crown has conceded, and we think correctly, that the learned sentencing Judge fell into error in two respects.
TOTALITY
First, the learned Judge fell into error by imposing the same sentence, three years imprisonment, with respect to each count. Counts 1 and 3 relate to approximately the same amount of money, approximately $120,000.00, and are in fact linked to the extent that the appellant’s conduct relevant to Count 3 was an attempt by the appellant to conceal his offence in Count 1. However, Count 2 relates to a significantly larger sum, $427,776.98. Count 4 relates to a sum of $3,427,513.10 and Count 5 to the same sum of $3,427,513.10. Counts 4 and 5 are connected in that Count 5 represents further dealings by the appellant with respect to the sum referred to in Count 4.
An important circumstance in determining the objective seriousness of each of the offences is the value of the property the subject of each charge. There is a significant difference in the objective seriousness of fraudulent conduct involving $120,000.00 and fraudulent conduct involving $3.4 million. Prima facie, the imposition of the same penalty for identical or substantially identical offences involving property of such disparate value suggests error. It suggests that the importance of the value of the property to determining the appropriate sentence for each individual offence was overlooked. An appropriate sentence for each offence must be determined before any question of accumulation is considered: Pearce v The Queen (1998) 194 CLR 610. This is the first step in compliance with the totality principle.
There were, of course, individual differences in the circumstances of each offence other than the value of the property involved relevant to determining the appropriate sentence for each offence. For example, the appellant’s conduct relevant to Counts 4 and 5 was in breach of undertakings given in associated civil proceedings in this court. However, we do not consider the sentences imposed by his Honour to be explicable by reference to these circumstances.
The second step required by the totality principle is to determine to what extent the appropriate sentences for each individual offence should be served concurrently or consecutively. In making this determination a sentencer is obliged to consider to what extent the individual offences contain common elements, because to require an offender to serve wholly consecutive sentences for offences with common elements would be to punish the offender twice for the commission of the elements that are in common.
A number of charges against the offender had common elements. Counts 4 and 5 involved two transactions relating to the same sum of money. Whilst Counts 1 and 3 related to funds from different sources, the funds the subject of Count 3 were used to balance the books of Burns Philp Trustee Company (Canberra) Ltd so as to disguise the taking of the funds in Count 1. On the appeal the Crown conceded that it was appropriate to make the sentences imposed on Counts 1 and 3 concurrent, as in reality there had only been one loss sustained by the company, being the funds referred to in Count 1.
By imposing wholly consecutive sentences for Counts 1 and 3 the learned sentencing Judge did not recognise that the victim had only suffered one loss, albeit that there were two offences. By imposing wholly consecutive sentences on Counts 4 and 5, the learned sentencing Judge did not recognise that each count related to the same sum of money.
The third step required by the totality principle is for the sentencer, having set appropriate individual sentences and having properly determined whether they are to be served concurrently or consecutively, to review the aggregated sentence and consider whether the aggregate is “just and proportionate”. There is no indication in the learned sentencing Judge’s Reasons for Sentence that his Honour reviewed the aggregate sentence in this way. As we will shortly set out, we are satisfied that the aggregate sentence imposed is manifestly excessive. In the circumstances of this case, that necessarily involves a finding that his Honour erred in the application of this step of the totality principle.
The learned sentencing Judge’s failure to properly apply the totality principle justifies this Court in re-sentencing the appellant if we are satisfied that a different sentence is appropriate: see AB v The Queen (1999) 198 CLR 111 per Hayne J. We will therefore consider whether, in the separate exercise of our discretion, different sentences, both individual and aggregate, are warranted. Before we do so we will, however, consider the other basis on which the Crown accepted the learned sentencing judge was in error.
MANIFESTLY EXCESSIVE
In the present case the learned sentencing Judge aggregated in whole the sentences imposed on Counts 1, 2, 3 and 5. The final aggregated sentence was one of 12 years imprisonment. This sentence was imposed against a background of the Crown having given an indication of its view of an appropriate sentence during the sentence hearing. In his submissions to the learned sentencing Judge, Mr Gill, for the appellant, said:
...[an aggregate] head sentence in the range of five years imprisonment would not be appealable.
The Crown responded:
...my learned friend reminds me, he has submitted that a term of imprisonment of five years imprisonment would be within the range. We accept that.
Whilst the Crown accepted that an aggregate sentence of five years imprisonment would be “within the range”, that was not a concession, as submitted to us by Mr Gill, that an aggregate sentence of five years imprisonment was the appropriate sentence. It is well known that sentencing is not a mechanical, arithmetic process. There will always be a range of sentences open to a sentencing court correctly exercising its sentencing discretion. The Crown statement to the learned sentencing Judge was not an expression of the appropriate sentence. Rather, it was a statement of the Crown view that such a sentence would be within the range of sentences appropriate for these offences. This is consistent with the Crown’s present submission that an aggregate sentence of five years imprisonment would be towards the bottom of that range.
The attitude of the Crown as to an appropriate sentence does not bind the court in the sentencing process. However, it cannot be entirely ignored. The Crown prosecutes on behalf of the community and sentencing judges will always carefully consider, and give appropriate weight to, Crown submissions as to the range of sentences appropriate for particular offending. We consider that the aggregate sentence of 12 years imprisonment was manifestly excessive.
OTHER GROUNDS OF APPEAL
The appellant submitted that the learned sentencing Judge failed to appropriately apply the principles of parity in sentencing the appellant. The appellant’s co-offender, Richard Drummond, entered pleas of guilty to three charges corresponding with Counts 2, 3 and 4 on the indictment filed against the appellant. He was sentenced by Miles CJ on 5 March 1999 to 52 periods of periodic detention on the first charge (the appellant’s Count 2), 65 periods of periodic detention on the second charge (the appellant’s Count 3) of which 52 periods were to be served concurrently with those imposed on the first charge, and 18 months imprisonment, suspended forthwith, with a recognizance to be of good behaviour for three years, with an undertaking to forfeit $10,000.00 and a condition that he pay a penalty of $5,000.00 to the Commonwealth before 31 May 1999.
In his written submissions, counsel for the Crown drew our attention to the comments of Miles CJ and Von Doussa J (with whom Weinberg J agreed) in Steer & Ors v The Queen [2000] FCA 462 at [14]:
14.The application of the principle of parity is always a difficult matter. It is difficult enough when there are only two co-offenders to be sentenced by one sentencing judge on material before the court in a joint trial and in sentencing proceedings which follow conviction for an offence committed jointly. There are special difficulties where other co-offenders have been sentenced for the same offence by another judge on another occasion on evidentiary material which may (and usually does) differ from that before the later judge. The principle of parity requires that the judge who sentences co-offenders subsequently, should not impose sentences which are so severe when compared with those imposed on the other co-offenders previously, that the sentences give rise to a justified sense of grievance on the part of those sentenced subsequently.
There can be no doubt that marked disparity in sentences imposed on co-offenders whose circumstances are comparable is itself a ground for allowing an appeal against sentence: see Lowe v The Queen (1984) 154 CLR 606 per Mason J at p 611.
We acknowledge that there is a marked disparity between the sentences imposed by the learned sentencing Judge on the appellant, and those imposed by Miles CJ on his co-offender. There will still be a marked, albeit lesser, disparity between the sentences we intend to impose on the appellant and those imposed on his co-offender. We consider such disparity is justified by the differences in circumstances between the offenders. The appellant was the driving force in the offences, the funds were controlled by the appellant and the appellant was overwhelmingly the principal beneficiary of the offending. The co-offender was subordinate to the appellant in the company. He did not receive anything like the personal benefits received by the appellant, nor did he stand to gain the business advantages sought by the appellant.
The co-offender’s conduct after arrest was also markedly different from that of the accused. The co-offender pleaded guilty at the earliest opportunity whereas the appellant maintained his opposition to the charges throughout committal proceedings occupying 137 sitting days. The appellant did not enter pleas of guilty until the eve of his trial, and thereafter made two separate applications for leave to withdraw his pleas. The co-offender provided very significant assistance to the prosecution, and offered to provide future assistance which he did by giving evidence against the appellant in the committal proceedings. Finally, the appellant fled the jurisdiction on or about 25 June 2000 and remained at large until he was arrested in Berlin in June 2010 and subsequently returned to Australia.
We consider that the circumstances of the appellant and those of his co-offender are so markedly different that the appellant cannot entertain any legitimate sense of grievance if the sentences imposed on him are considerably harsher than those imposed on his co-offender.
The final matter to be addressed is the appellant’s submission that the learned sentencing Judge erred in imposing sentences that failed to distinguish between the different uses to which the funds the subject of each count were put by the appellant. The appellant’s submission is that insofar as some counts involved the appellant using the funds of the company for business type purposes, albeit not authorised by the clients of the company, these counts reveal less criminality than those where the appellant had applied the misappropriated funds to his own immediate benefit.
The basis for this submission was said to be the decision of Higgins J (as he then was) in the matter of R v Elvin [1997] ACTSC 1, an unreported decision delivered 10 January 1997. The defendants in that case were the directors of a company which had for a number of years conducted the business of manufacture and supply of concrete. In 1993 an Australian Tax Office audit of the company found apparent discrepancies in the actual as opposed to the reported assessable income for the company for the financial years ending 30 June 1987 through to 30 June 1991. It was found that the company had understated its income for those financial years by failing to include in the company’s returns cash sales totalling some $241,778.00. His Honour said at [6]:
Had that income merely been diverted to the personal use of the offenders, their culpability would, prima facie be considerable.
His Honour went on to note that it was not the case that the income had been diverted to the personal use of the offenders. He noted that the cash receipts were, at least substantially, used to pay business related expenses. Counsel for the appellant in these proceedings relies upon his Honour’s comments as evidencing a principle that the misappropriation of monies for the purpose of payment of business expenses is less culpable than the misappropriation of monies for personal use. We do not think that his Honour’s comments in Elvin stand for that proposition, nor do we think that such a proposition can be maintained as a matter of principle.
His Honour’s comments in Elvin have been taken out of context by the appellant. After making the comments referred to, his Honour noted that the Australian Tax Office acknowledged that all but $13,997.00 of the $241,778.00 in unreported income could legitimately have been written off as tax deductible expenditure. Thus, his Honour continued, only a small amount of the taxable income ended up as understated. His Honour’s comments must be understood against this background, as explaining that the figure of $241,278.00 did not reflect the actual loss to the revenue.
In the instant case we consider that the learned sentencing Judge was correct not to draw any distinction in sentencing between the uses to which the appellant put the misappropriated money. In his written submissions, counsel for the respondent accurately sets out the position with respect to the appellant’s use of the funds:
In each case the character of the use of the funds was essentially the same, namely to further the business interests of the appellant and for his personal expenses.
RESENTENCING
Having determined that the learned sentencing Judge fell into error the appeal must be upheld and the appellant resentenced.
We consider the following sentences to be just and appropriate:
Count 1 18 months imprisonment
Count 2 Two years imprisonment
Count 3 18 months imprisonment
Count 4 Three years six months imprisonment
Count 5 Three years six months imprisonment
The totality of the appellant’s criminality is best expressed by cumulating the sentences on Counts 1, 2 and 4, with the sentence imposed on Count 3 to be served concurrently with that imposed on Count 1, and the sentence imposed on Count 5 to be served concurrently with that imposed on Count 4. This results in an aggregate sentence of seven years imprisonment. There will be a nonparole period of five years. Both the aggregate sentence and the nonparole period will commence on 3 April 2009.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.
Associate:
Date: 16 February 2012
Counsel for the Appellant: Mr S Gill
Solicitor for the Appellant: Legal Aid ACT
Counsel for the Respondent: Mr P S Hastings QC
Solicitor for the Respondent: Commonwealth Director of Public Prosecutions
Date of hearing: 1 November 2011
Date of judgment: 16 February 2012
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