Police v Curtis - [2004] SASC 184

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Criminal)
POLICE v CURTIS & MARSHALL
Judgment of The Honourable Justice Gray
25 June 2004
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES
Crown appeal against sentences - both appeals heard together - sentences appealed on the grounds that they were manifestly inadequate and that they failed to adequately reflect prevailing sentencing standards - discussion of Crown appeals against sentence.

CRIMINAL LAW - PARTICULAR OFFENCES - PROPERTY OFFENCES - MISAPPROPRIATION - FRAUDULENT CONVERSION BY PERSON ENTRUSTED WITH PROPERTY
Curtis pleaded guilty to 108 counts of falsification of accounts, sentenced to four years and 6 months imprisonment, non parole period of 20 months - Marshall pleaded guilty to 20 counts of receiving, sentenced to two years and three months imprisonment, non parole period of 10 months - Curtis' offending occurred in the workplace -Curtis abused position of trust as accounts clerk - consideration of Curtis' and Marshall's personal antecedents and efforts to rehabilitate themselves - discussion of prevailing sentencing standards for fraud related offending - sentences imposed were merciful but within prevailing sentencing standards - magistrate not in error - appeals dismissed.

CRIMINAL LAW - JURISDICTION, PRACTICE AND PROCEDURE - JUDGMENT AND PUNISHMENT - SENTENCE - CONCURRENT, CUMULATIVE AND ADDITIONAL SENTENCES, SENTENCES ON ESCAPE AND COMMENCEMENT OF SENTENCE
Sentencing approach of magistrate - power of magistrate to impose one sentence for multiple offences - power of magistrate to impose one sentence of more than two years imprisonment - discussion of sections 18A and 19(3) of the Criminal Law (Sentencing) Act 1988 (SA) - held that the limitation contained in section 19(3) does not operate to prevent a magistrate from arriving at the one sentence for multiple offences of more than two years imprisonment - sentence imposed within the power of the magistrate.
Criminal Law (Consolidation) Act 1935 (SA) s 178(b), s 196; Criminal Law (Sentencing) Act 1988 (SA) s 18A, s 19(3), referred to.
R v Osenkowski (1982) 30 SASR 212; Everett v The Queen (1994) 181 CLR 295; Police v Cadd (1997) 69 SASR 150; Ticala v Police (Lander J, 16 July 1996, unreported); Rang v SA Police (Mullighan J, 12 November 1993, unreported); R v Hunt [2001] SASC 145; R v Musolino [2004] SASC 89; Blaser v The Queen (King CJ, 18 June 1992, unreported); R v Ashdown (1994) 72 A Crim R 63; R v Davies (1996) 88 A Crim R 229; R v Cavanagh [1996] SASC 418; R v Hignett [2000] SASC 280; Wilson v Police [2001] SASC 424; R v Powell (2000) 81 SASR 9; Hebberman v Police [2002] SASC 267; R v Suri [2004] SASC 80; The Queen v Golding (1080) 24 SASR 161, considered.

POLICE v CURTIS & MARSHALL
[2004] SASC 184
Magistrates Appeal
GRAY J:
Introduction

These are Crown appeals against sentence. As the offending is related it is convenient to deal with both appeals together.
On 22 August 2003 Graeme Curtis pleaded guilty to 108 counts of falsification of accounts contrary to section 178(b) of the Criminal Law Consolidation Act 1935 (SA).[1] Each offence exposed Curtis to a maximum term of imprisonment of seven years. The total amount of the defalcation was $591,053.09. Curtis was sentenced to imprisonment for four years and six months with a non-parole period of twenty months.
[1] This section has subsequently been replaced with a new legislative scheme dealing with offences of dishonesty now contained in Part 5 of the Criminal Law (Consolidation) Act 1935 (SA)
On 1 August 2003 David John Marshall pleaded guilty to 20 counts of receiving contrary to section 196 of the Criminal Law Consolidation Act.[2] Each offence exposed Marshall to a maximum term of imprisonment of eight years. The total amount of defalcation was $132,691.35. Marshall was sentenced to two years and three months imprisonment with a non parole period of ten months.
[2] This section has subsequently been replaced with a new legislative scheme dealing with offences of dishonesty now contained in Part 5 of the Criminal Law (Consolidation) Act 1935 (SA).
The Crown accepted that the usual principles in relation to Crown appeals against sentence had application. These principles are well settled.[3] In R v Osenkowski King CJ observed:[4]
The proper role for prosecution appeals, in my view, is to enable the courts to establish and maintain adequate standards of punishment for crime, to enable idiosyncratic views of individual judges as to particular crimes or types of crime to be corrected, and occasionally to correct a sentence which is so disproportionate to the seriousness of the crime as to shock the public conscience.
Counsel for the Crown acknowledged that Crown appeals against sentence should only be granted in rare and exceptional circumstances.
[3] See Everett v The Queen (1994) 181 CLR 295 at 299-300; Police v Cadd (1997) 69 SASR 150 at 156-159 and R v Osenkowski (1982) 30 SASR 212 at 213
[4] (1982) 30 SASR 212 at 213
The Offending
Curtis commenced work as an accounts clerk at ETSA in December 1995. He began to falsify accounts in 1998. The offending continued until December 2002.
Curtis would transfer funds as ‘payment’ to a ‘one time vendor’. However he would include a purported supplier on the purchase order being a name and address of his choice. Curtis then used his ‘user ID’ to process the payments. He was able to access ETSA funds as a result of his knowledge of excess funds remaining after allocations to different jobs or tasks by ETSA. The modus operandi was unsophisticated. Ultimate detection was all but inevitable.
Curtis generally arranged to split the funds with the recipients. In some cases he received less than half. Ten persons were identified as receiving payment. Often Curtis would transfer money to a bank account in the name ‘D Marshall’.
Marshall first met Curtis when he worked as a trainee barman at the Pooraka Football Club. Curtis approached Marshall and asked if he had a bank account and whether he needed money. Marshall agreed to be involved and to allow his name and bank account to be used. Curtis then began transferring money to Marshall’s bank account. Shortly after the money had been deposited Curtis would demand 50 per cent of the monies from Marshall.
Initially the amounts transferred by Curtis were of the order of $1,000 to $2,000, however this later increased to amounts of up to $8,000 or $9,000. Curtis’ offending became a ‘regular thing’ and occurred more than 100 times involving amounts totalling around $600,000.
Curtis’ misconduct was discovered in February 2003 when ETSA’s “accounts payable one time vendor section” was audited. The audit disclosed anomalies in payments made to creditors, particularly ‘D Marshall’. A search of invoices revealed that no services had been rendered by, or received from, ‘D Marshall’. It was discovered that Curtis had authorised the payments.
Marshall received a total of $132,691.35. This resulted from electronic funds transfers and cheques.
No restitution had been made to ETSA for its losses. However, upon Curtis’ termination of employment, ETSA retained his unpaid wages and his annual and long service leave entitlements totalling $12,795.70.
Antecedents
Curtis
Curtis was born and raised in Broken Hill. He maintained average grades at school, completed his High School Certificate and left at the age of 15 years. He undertook a pre-apprenticeship course for 12 months before working in a hardware store for five years. He later moved to Adelaide where he worked in hardware stores before obtaining employment with ETSA. Curtis was first employed as an assistant storeman at ETSA and later transferred to a clerical position. As earlier mentioned, in December 1995 he obtained a position in the Accounts Payable section.
At the time of sentencing, Curtis was 41 years old and lived with his mother at Modbury. He separated from his wife in July 1995. He has two children aged 16 and 13 with whom he maintained regular contact. Curtis had been a long-standing member of the Pooraka Football Club, engaging in volunteer work and acting as treasurer prior to the discovery of his offending.
Curtis began using alcohol at the age of 18, drinking on a social basis several times a week. His pattern of drinking increased markedly after the breakdown of his marriage.
Curtis began gambling at the age of 14. During his childhood, he was often exposed to horseracing, as his uncle was a bookkeeper. Curtis’ gambling increased when he turned 18. He then gambled regularly. There was a steady increase in the amount he gambled. Curtis’ gambling put financial pressure on his marital relationship. He began to ‘stretch’ his gambling and drinking money. His financial circumstances deteriorated. He recalled forging his wife’s signature to access money from her bank account.
Due to financial difficulties, Curtis often took second jobs and frequently borrowed money from friends and relatives. Following his separation from his wife in 1995, Curtis gambled more frequently and in increasing amounts.
Dr Raeside observed that Curtis “acknowledged that his life revolved around gambling since his adolescence.” He reported:
[Curtis] described a typical compulsive pattern to this gambling, whilst acknowledging the wrongfulness of it and an ambivalent desire to stop. He continued to gamble until the time his charges were laid, but he continued to experience psychological factors with a desire to gamble. He described a range of depressive symptoms in association with his current circumstances and the possibility of being incarcerated.
Based on the information available to me and from my interview with Mr Curtis I believe that he currently has an Adjustment Disorder with Depressed Mood, primarily secondary and “reactive” to the circumstances in which he finds himself. …
As indicated, I believe that [Curtis] has the features of pathological gambling, with a typical compulsive pattern, developed over many years. Whilst in some cases these feelings associated with gambling can be used in an attempt to ward off depressive symptoms, it is apparent in Mr Curtis’ case that his depressive symptoms were secondary to his gambling behaviour and its adverse consequences. Despite his attendance at Gambler’s Anonymous on a couple of occasions he admitted that this was more to be seen to be trying to do something rather than any real desire to gain benefit from it. Clearly he is in need of significant assistance to deal with his gambling and remains at high risk of resuming such behaviour if circumstances permitted.
Dr Jadhav also reported that Curtis had significant problems associated with alcohol and gambling and diagnosed Curtis as a pathological gambler with an adjustment disorder (depressive type) and an alcohol dependent syndrome.
Since his arrest, Curtis has acknowledged his alcohol and gambling problems and has expressed a willingness to seek assistance in an attempt to overcome these problems. Curtis has one prior conviction for a drink driving offence.
Marshall
At the time of sentencing, Marshall was 38 years of age. He has an eight-year-old daughter, but was separated from the child’s mother.
Marshall has worked all of his adult life, however he has often lost employment due to alcohol abuse. Since his arrest, Marshall found employment as a ceiling fixer.
Marshall has been diagnosed as an alcoholic and suffers from a depressive illness. He acknowledged that he has a serious gambling problem. Marshall had a number of criminal convictions all dealt with by way of fines. None related to offences of dishonesty.
It was submitted by counsel that Marshall had prospects for rehabilitation. Since his arrest, Marshall has received positive support from Alcoholics Anonymous and has ceased drinking. It is said that he has not gambled. Marshall’s relationship with his former partner has improved considerably. It is likely that he will have greater access to his daughter in the future.
Magistrate’s Reasons
When sentencing Curtis and Marshall, the learned magistrate had regard to their personal antecedents. The magistrate noted Curtis’ and Marshall’s efforts to rehabilitate themselves and seek help to address their gambling and alcohol related problems. The early pleas of guilty were also noted and a reduction of 25 per cent was applied with respect to each defendant. The magistrate noted the seriousness of the offending, the large amounts of money involved and the period of time over which the crimes were committed. He considered that a suspension of sentences of imprisonment was inappropriate in the circumstances of each defendant.
Curtis
Particular regard was had to Curtis’ prior good character and cooperation with police. Regard was also had to the expert evidence adduced from Dr Raeside concerning Curtis. In relation to Curtis, the magistrate observed:
Mr Curtis you are now 41 years old, you were born at Broken Hill. You have had a long working history but for many years you have had a very serious gambling addiction. This has had as your counsel described it a demolishing effect on your life. Ultimately this has led to the termination of your employment on 24 February this year. … At some time in 2002 you were asked to move from your area of work and ultimately that led to an inquiry about your activities. … You are very sorry for your conduct, you are aware of its serious consequence and you are concerned about the shame you bought on yourself and your friends. You have pleaded guilty to all these matters, you have been cooperative with the police, you have provided them with a draft statement and given particulars of the benefits given to others as well as providing to the police details of your transaction methods.
…
I have taken sworn evidence from Mr Martin, Mr Underwood and Mr Todd who have known you in various capacities at the Pooraka Football Club. I note the antecedent report and I proceed on the unchallenged basis that prior to these matters becoming apparent that you are a person of otherwise good character.
As earlier observed, Curtis was sentenced to imprisonment for four years and six months with a non-parole period of twenty months.
Marshall
The magistrate directed the following observations toward Marshall:
You Mr Marshall are now 38. You are an alcoholic and a person suffering a depressive illness. Between November 1999 and November 2002 you received some $120,000 to $130,000. You were involved in binge drinking in connection with some of that money but the balance was in fact spent on gambling. You have nothing to show for this money at all, your total assets are a table and some chairs. You offered an early plea of guilty some five months ago. You have no history for offences of dishonesty. Your cooperation has as your counsel says saved a trial. You are not in a position to make restitution. Dr Raeside describes your illness as depression. You are presently attending Alcoholics Anonymous three times a week. I am asked to give you a chance to continue to rehabilitate yourself futher.
Marshall was sentenced to two years and three months imprisonment with a non parole period of ten months.
General Observations
Jurisdiction
As the sentences imposed exceed two years imprisonment, it is necessary to consider the interaction between sections 18A and 19(3) of the Criminal Law (Sentencing) Act 1988 (SA). Those sections provide:
18AIf a person is found guilty by a court of a number of offences, the court may sentence the person to the one penalty for all or some of those offences, but the sentence cannot exceed the total of the maximum penalties that could be imposed in respect of each of the offences to which the sentence relates.
19(3)The Magistrates Court does not have the power to impose--
(a a sentence of imprisonment that exceeds 2 years; or
(b) a fine that exceeds $150 000.
In Ticala v Police[5], Lander J took the view that section 19 limits the power of a magistrate to impose a sentence of two years in respect of any one offence. This is reflected in the language of the sub-section - it refers to “offence” rather than “offences”. Lander J observed:
In my opinion, s19 prohibits a Magistrates Court from exercising a power to impose a sentence of imprisonment which exceeds two years in respect of any one offence. If it was otherwise it would mean that if these informations had been heard on separate days before separate Magistrates, then the separate Magistrates could have ordered that the appellant serve a period of imprisonment of two years in relation to each of the informations. Moreover, the second Magistrate would have had the power to make the order for imprisonment in respect of the second information cumulative upon the first.
In my opinion, s19 must be read and understood as confining the power of a Magistrates Court to impose a sentence of imprisonment of two years or less on each separate offence on any information or complaint.
[5] Ticala v Police (Lander J, 16 July 1997, unreported)
It was submitted by the Crown that the magistrate made no error when imposing sentences pursuant to section 18A which exceeded two years. It was contended that the magistrate had the power to impose the one penalty being a sentence of imprisonment of more than two years provided the sentence imposed did not exceed the total maximum penalties for each individual charge.
In Rang v SA Police[6] this was accepted by Mullighan J as the correct approach:
The meaning of s. 18 is clear. The one sentence which may be imposed for all of the offences cannot exceed “the total of the maximum penalties that could be imposed in respect of each of the offences”. It may be seen that the section makes it plain that a sentence may exceed the maximum sentence for one offence. The meaning of s. 19(3) is also clear. The maximum penalty for one offence may not exceed 2 years. There is no warrant for interpreting that section so as to mean that a sentence imposed pursuant to s. 18a for multiple offences may not exceed the maximum penalty for one offence permitted by s 19(3). … In imposing a sentence of imprisonment for 4 years, [the magistrate] was not exceeding any limit on the sentencing discretion of a learned Special Magistrate imposed by s. 19(3). There is no substance in this ground.
[6] Rang v SA Police (Mullighan J, 12 November 1993, unreported)
However in R v Hunt[7] Lander J appears to have taken a different view:
The Magistrate was constrained by s 19 of the Criminal Law (Sentencing) Act 1988 (SA) not to impose a sentence of imprisonment that exceeded two years in respect of any offence. In those circumstances the Magistrate could not impose a penalty of more than two years in respect of the illegal use conviction even though s 86A of the Criminal Law Consolidation Act 1935 (SA) provided a penalty of not more than four years.
However, he did treat the offending in relation to counts 1, 3 and 4 as being appropriate to be dealt with as a single sentence under s 18A.
Once the Magistrate decided that it was appropriate to exercise power under s18A he was not able to sentence the appellant to imprisonment for more than two years, in total, in respect of those three offences.
[7] [2001] SASC 145
Section 19(3) limits the magistrate’s power to impose a sentence of more than two years for “an offence”. Section 18A allows one sentence to be imposed for multiple offending. Nothing in the wording of section 18A suggests that a magistrate sentencing pursuant to this section is limited by the terms of section 19(3) to impose the one sentence that does not exceed two years. On the contrary, the context of the legislation suggests that section 18A provides sentencing magistrates with a practical alternative to imposing cumulative or concurrent sentences for separate offences on separate occasions.

The limitation expressed in section 19(3) relates to the maximum penalty to be imposed by a magistrate for any single offence and does not operate to prevent a magistrate from arriving at one sentence for multiple offences of more than two years imprisonment.
The reasoning in Rang should be preferred. By imposing sentences of more then two years imprisonment for all of the offending of Curtis and Marshall, the magistrate did not exceed any limit placed upon him by the terms of section 19 of the Sentencing Act.
Dishonest Conduct in Breach of Trust
Cases of theft and fraud in breach of trust are not uncommon. In assessing the severity of the conduct courts have regard to a number of factors. Those factors include the nature of the breach of trust, the amount of money or value of the property involved, the number of transactions, the length of time during which the dishonest behaviour continued and the amount of restitution.
In R v Cavanagh[8] Debelle J considered the adequacy of a sentence imposed for fraudulent conduct by a trustee and financial adviser and observed:
… the moral blameworthiness in this kind of offending compares quite unfavourably with a typical multiple housebreaking. This kind of offending is premeditated, deliberate and repetitive. The fact that it involves deceit only serves to underline the criminal wilfulness of the conduct. In cases of this kind, the description of the crime as fraudulent conversion should not disguise the fact that it is a form of stealing - in this case, as in others, stealing on a grand scale. Deterrence must therefore be a predominant factor in the sentence.
[8] [1999] SASC 418
The degree of trust reposed in a defendant is a particularly important factor to be considered when sentencing. In cases of abuse of position of trust, good character and an absence of prior convictions are typical and generally have little weight because of the expressed need for a general deterrent sentence. Nor do immediate intentions to repay financial loss or personal humiliation have significant weight for they are factors commonly encountered in such cases.
As a result caution should be taken when taking into account a person’s prior good character in circumstances of fraudulent conduct. In R vMusolino it was observed:[9]
Reliance was also placed on the appellant’s previously unblemished criminal record and his good character, and the fact that the sentencing Judge did not accord any or sufficient weight to that good character, such as might be the case with a solicitor, banker or financial consultant. It was said that what gave rise to the position of trust in this case was the misrepresentation as to his qualifications and status.
That submission overlooks two important factors. One is that it was not merely the representation made to some of the victims about his status that induced the trust but his initial and continued presentation as an honest, competent and trustworthy financial and corporate advisor, knowing that any reference to his antecedent character and community activities would have borne this out. The second factor relates to the need for deterrence adverted to by Cox J in R v Davies (1996) 88 A Crim R 226 at 229:
“[C]rimes of this sort are usually committed by respectable people of good standing – that is how they come to be in positions of trust which they are able to exploit to their own advantage. The deterrent effect of a sentence or non-parole period upon other people of good reputation, in a similar position and similarly tempted, would be substantially diminished if persons who commit a series of offences of this kind are still given substantial credit for their previous good character. Nor for the same reason should much allowance be made for the circumstances that, as is almost always the case, such a defendant is unlikely to offend again.”
In a similar vein Doyle CJ said, at 231:
“[D]eterrence is an important aspect of sentencing. If credit is to be given for the matters identified by the sentencing judge and referred to by Cox J, the scope for adequate deterrence will be substantially eroded. This is the case because the matters identified by the sentencing judge and by Cox J – previous good character, unlikelihood of further offending and so on, are regularly found in cases such as this, as Cox J points out. The need for deterrence, and the fact that these features are routinely present in such cases, combine to mean that such a low non-parole period cannot be justified upon the basis of such matters in cases such as this.”
[9] R v Musolino [2004] SASC 89 at [23] – [27]
Receiving
The offence of receiving is treated seriously because it facilitates theft or fraud. On occasions this has led courts to take the view that receiving may be a more serious crime than theft. However courts have drawn a distinction between defendants in the business of receiving stolen goods for gain and those involved in the isolated or sporadic receipt of stolen property. Courts have treated the fact that a receiver was privy to a theft as an aggravating factor.
Prevailing Sentencing Standards
It was contended by counsel for the Crown that the sentences imposed by the magistrate failed to adequately reflect prevailing sentencing standards. Counsel for the Crown undertook a review of a number of recent cases involving sentencing for fraudulent conduct.
Blaser v The Queen[10] involved two counts of false pretences amounting to larceny as a servant. The offending occurred over a period of 18 months in an employment setting. The offender was a first offender. A sentence of 21 months imprisonment with a non parole of 12 months was imposed. The offender’s guilty pleas, cooperation and contrition was taken into account. This sentence was upheld on appeal.
[10] Blaser v The Queen (King CJ, Cox and Bollen J, 18 June 1992, unreported)
R v Ashdown[11] involved fraudulent conduct by an executive secretary to a partner of a law firm. On appeal the court substituted a suspended sentence of six years for a sentence of imprisonment for four years imprisonment with a non parole period of two years.
[11] R v Ashdown (1994) 72 A Crim R 63
R v Davies[12] involved an appeal by a defendant against a sentence imposed for fraudulent conversion by a trustee. The initial sentence of nine years imprisonment with a non parole period of five years was substituted for a head sentence of eight years imprisonment with a non parole period of five years.
[12] R v Davies (1996) 88 A Crim R 229
R v Cavanagh[13] involved the fraudulent conversion and misappropriate of $240,000 from a trust fund. The offending occurred over four and a half years and comprised 144 separate counts. The sentencing judge allowed a reduction of 10 per cent for the late pleas of guilty. A sentence of nine years imprisonment with a non parole period of five years was initially imposed. The offender’s remorse and contrition was also taken into account. The sentence imposed was appealed on the basis that it was manifestly excessive. On appeal, it was held that while the head sentence of nine years was manifestly excessive, the non parole period of five and a half years was appropriate. The appeal was allowed to reduce the head sentence from nine to eight years’ imprisonment.
[13] [1999] SASC 418
R v Hignett[14] involved 70 counts of fraudulent conversion by a property manager. This offending occurred over more than six years and involved a property manager in a position of trust taking advantage of an elderly, disabled and vulnerable client who relied upon him to manage his financial affairs. A reduction of two years was made on account of the pleas of guilty and cooperation with the police. The court imposed a sentence of 10 years with a non parole period of six years.
[14] R v Hignett [2000] SASC 280
Wilson v Police[15] involved 151 counts of fraudulent conversion. A reduction was made on account of the plea of guilty. The sentencing judge imposed a sentence of three years and six months imprisonment with a non parole period of 18 months. This sentence was upheld on appeal.
[15] Wilson v Police [2001] SASC 424
R v Powell[16] involved 52 counts of falsification of bank accounts by an employee over a two year period totalling $672,156.19. The defendant had a pathological gambling disorder. A reduction of two and a half years had been made on account of the pleas of guilty, cooperation and contrition. A sentence of five years and six months with a non parole period of two years was initially imposed. A Crown appeal against the original sentence was allowed and the sentence increased the sentence to seven years with a three year non parole period.
[16] R v Powell (2001) 81 SASR 9
Hebberman v Police[17] involved an appellant who was charged with larceny as a servant and sentenced to 16 months imprisonment with a non parole period of eight months. A one third reduction was made for pleas of guilty and cooperation with the police. The offending involved the appellant stealing cash from her employer, Riding for the Disabled Association of South Australia Inc. The offending occurred over a 28 month period. The sentence imposed was appealed on the grounds that it was manifestly excessive and should have been suspended due to the ill health of the appellant. On appeal it was held that the head sentence imposed was not manifestly excessive, however the appeal was allowed for the purpose of reducing the non parole period from eight to six months.
[17] Hebberman v Police [2002] SASC 267
R v Dubois[18] concerned 32 counts of false pretences by a financial planner and involved gross abuse of trust of a number of vulnerable victims, including elderly and disabled persons. An appeal by Dubois was dismissed. A reduction of 20 per cent was made on account of the pleas of guilty. A sentence of 12 years imprisonment with a non parole period of eight years was imposed.
[18] R v Du Bois (Gray J, 21 February 2003, sentencing remarks)
R v Suri[19] involved a director fraudulently converting payments totalling around $160,000 made to his company by debtors. The director pleaded guilty to six counts of fraudulent conversion as a trustee, three counts of false pretences and 12 counts of fraudulent conversion. The sentencing judge imposed a sentence of imprisonment of three years and six months with a non parole period of one year and six months. The sentencing judge indicated that had it not been for the guilty pleas, a head sentence of five years imprisonment would have been imposed. The director appealed on the grounds that the sentence was manifestly excessive. The Court dismissed the appeal and observed:[20]
This Court has emphasised on a number of occasions that “systematic fraud committed over a period of time by a person who is in a position of trust will ordinarily attract a substantial sentence of imprisonment”.
Furthermore, in sentencing for crimes of this kind, the need for general and personal deterrence is a paramount consideration: see R v Chisholm per King CJ:
“The systematic course of dishonesty undoubtedly calls for a substantial sentence and there is, moreover, the important aspect of deterrence. The courts have a responsibility to impose sentences upon those who abuse the trust which is placed in them which will operate as a deterrent to others in a position of trust who might either for psychological or any other reason experience the temptation to take what does not belong to them.”
[19] R v Suri [2004] SASC 80
[20] R v Suri [2004] SASC 80 at [30] – [31]
R v Musolino[21] involved an appeal against a sentence of six years imprisonment with a non-parole period of three years for 15 counts of fraudulent conversion. The sentence was imposed following jury verdicts. The offending involved an appellant holding himself out to be an accountant and an auditor employed by the Commonwealth Government to gain the trust of his victims. The total amount involved was $201,642.80. When dismissing the appeal, Bleby J (with whom Perry and Sulan JJ agreed) emphasised the fact that the appellant:
… falsely held himself out as a person with experience, integrity and expertise in financial and corporate services. By so holding himself out and by falsely representing what he could and would do … he gained the trust and confidence of those who committed their money to him.
[21] R v Musolino [2004] SASC 89
This review of recent sentences demonstrates the wide range of punishment imposed for fraudulent conduct. This range reflects the varying circumstances of the offending and the differing degrees of criminal culpability involved. There may be an understandable and significant difference in the criminal culpability of a professional financial adviser misusing his or her position of trust to take advantage of vulnerable clients and an employee misusing his or her position to take advantage of an employer. It is to be observed that a receiver’s offending does not include the aggravating feature of a breach of trust.
Manifestly Inadequate
Counsel for the Crown contended that this court should interfere with the sentence imposed on Curtis on the ground that the sentence was so disproportionate to the seriousness of the crime as to “shock the public conscience”. The sentence, it was said, was manifestly inadequate when having regard to the following factors:
-      the gravity of the offending and the amount of defalcation involved;
-      the need for general deterrence;
-      the period of time over which the course of criminal conduct took place;
-      the breach of trust involved in the commission of the offences;
-      the systematic and repetitive nature of the offending; and
-the maximum penalties prescribed by the legislature. The maximum penalty for falsification of accounts is seven years imprisonment. The maximum penalty for individual counts which could be imposed by the magistrate was two years for each count.[22]
[22] Criminal Law Consolidation Act 1935 (SA) section 178(b); Criminal Law (Sentencing) Act 1988 (SA) section 19. This section has subsequently been replaced with a new legislative scheme dealing with offences of dishonesty now contained in Part 5 of the Criminal Law (Consolidation) Act 1935 (SA).
It was argued that it was necessary for the magistrate to impose a sentence that would act as an adequate deterrent to members of the community in positions of trust. It was said that general deterrence was a paramount consideration in sentencing for offending of this type.
Similar grounds of appeal of sentence were advanced by counsel for the Crown with regard to Marshall’s sentence. It was submitted that Marshall’s sentence of two years and three months imprisonment with a non parole period of 10 months was manifestly inadequate having regard to:
-      the gravity of the offending;
-      the period of time over which the offences were committed;
-      the lack of restitution; and
-the maximum penalty prescribed in the legislation. The maximum sentence for receiving is eight years imprisonment. The maximum penalty the magistrate could impose was two years for each count.[23]
It was said that whilst Marshall was not the principal offender, his conduct facilitated the principal offender’s conduct for a prolonged period of time.
Defence Submissions
[23] Criminal Law Consolidation Act 1935 (SA) section 196; Criminal Law (Sentencing) Act 1935 (SA) section 19. This section has subsequently been replaced with a new legislative scheme dealing with offences of dishonesty now contained in Part 5 of the Criminal Law (Consolidation) Act 1935 (SA).
Curtis
It was submitted by counsel that the magistrate did not err in imposing the sentence of imprisonment for four years and six months with a non-parole period of 20 months. It was said that this sentence did not fall outside the sentencing range for this type of offending. It was further submitted that the sentence imposed was manifestly excessive and disproportionate to that imposed upon the co-accused given the elements of joint enterprise involved in the commission of the offence.
It was also contended by counsel that this case did not fall within the category of ‘rare and exceptional’ and that to interfere with the sentence imposed would circumscribe unduly on the sentencing discretion of the magistrate.
Counsel submitted that it was correct for the magistrate to have regard to prospects of rehabilitation and acts of mitigation when sentencing Curtis. However, it was said that the magistrate overlooked the steps taken by Curtis to cease offending. The magistrate appeared to conclude that Curtis was ‘moved’ from the Accounts Payable section of ETSA to another department, however the evidence before the court was that Curtis actively sought the transfer in an effort to stop his offending behaviour.
Counsel also submitted that the magistrate failed to take into account the assistance Curtis provided to officers investigating his offending. Counsel referred to The Queen v Golding where Wells J observed: [24]
Where a prisoner is shown to have been an informer (whether in the matter in which he has been convicted or some associated matter or matters, or in some matter or matters that has or have no direct relation to the offence for which he has been convicted), the court, other considerations apart, will be disposed to show leniency to mark the good he has done … .
[24] (1980) 24 SASR 161 at 172
Marshall
It was submitted by counsel that the sentence imposed of two years three months with a non-parole period of 10 months was adequate and within the sentencing discretion of the magistrate. It was contended that the sentence was merciful and correct having regard to Marshall’s efforts to rehabilitate himself.
Counsel also submitted that the magistrate properly had regard to the efforts of Marshall to cease drinking alcohol, cease gambling and obtain steady employment. It was said regard was had to his relatively low incident of prior offending, his early plea of guilty and his personal circumstances. It was also emphasised that unlike Curtis, Marshall was not in a position of trust.
Conclusion
When sentencing Curtis and Marshall, the magistrate correctly recognised that a reduction should be made on account of the pleas of guilty, contrition and remorse. A reduction of 25 per cent for each defendant was made. In the circumstances such a reduction was not inappropriate.
The magistrate correctly took into account Curtis and Marshall’s problems with alcohol and gambling and their efforts to rehabilitate themselves. It was appropriate for the magistrate to impose a shorter than usual non-parole period with longer periods of probation. This addressed the rehabilitation prospects of the defendants and the long term protection to the community. The magistrate also made allowance for Curtis’ co-operation with the police. This cooperation had the potential to provide both valuable information and material assistance.
In the case of Curtis, the magistrate’s reasoning suggests that before allowances were made, his probable starting point before reduction was a head sentence of about seven years. The magistrate made a reduction of 25 per cent on account of the pleas of guilty and contrition. The magistrate was also aware of Curtis’ co-operation with the police with respect to the identity of others involved. The submission that he failed to have regard to this consideration should be rejected. In these circumstances, a sentence of four and a half years imprisonment although merciful was not outside the proper exercise of the magistrate’s sentencing discretion.
In the case of Marshall, the magistrate’s starting point before reduction on account of the guilty pleas, appears to have been a term of imprisonment of three years. However there were good prospects for rehabilitation. There was no lack of parity with the sentence imposed on Curtis. Marshall was not directly involved in Curtis’ dishonest conduct. He did not submit any false accounts. All that was the conduct of Curtis. Marshall was not in business as a receiver. The sentence imposed on Marshall was not outside the proper exercise of the sentencing discretion.

As earlier observed, given the wide range of penalties that may be imposed for fraudulent and dishonest conduct, the sentences imposed are not manifestly excessive. As King CJ observed in Osenkowski:[25]
It is important that the prosecution appeal should not be allowed to circumscribe unduly the sentencing discretion of the Judges. There must always be a place for the exercise of mercy where Judges’ sympathies are reasonably excited by the circumstances of the case. There must always be a place for the leniency which has traditionally been extended even to offenders with bad records when the Judge forms the view, almost intuitively in the case of experienced Judges, that leniency at that particular stage of the offender’s life might lead to reform.
While the sentences may be described as merciful, they were not in error.
[25] (1982) 30 SASR 212 at 212
Both appeals are dismissed.