R v Bandjak - [2011] SASCFC 19

SUPREME COURT OF SOUTH AUSTRALIA
(Court of Criminal Appeal)
R v BANDJAK
[2011] SASCFC 19
Judgment of The Court of Criminal Appeal
(The Honourable Justice Gray, The Honourable Justice Vanstone and The Honourable Justice White)
1 April 2011
CRIMINAL LAW - PARTICULAR OFFENCES - PROPERTY OFFENCES - OTHER FRAUDS AND IMPOSITIONS - FRAUDULENTLY OR DECEPTIVELY OBTAINING MONEY, VALUABLE, FINANCIAL BENEFIT OR ADVANTAGE - SENTENCE
Appellant convicted of one count of deception contrary to s 139 of the Criminal Law Consolidation Act 1935 (SA) - whether judge made errors of fact that were relevant to sentence - whether judge erred in refusing to suspend.
Held: appeal allowed - sentence set aside and new sentence of two years three months imprisonment imposed with non-parole period of sixteen months, not suspended.
Criminal Law Consolidation Act 1935 (SA) s 139; Criminal Law (Sentencing) Act 1988 (SA) s 10, referred to.
R v Robertson (1984) 115 LSJS 51; Kovacevic v Mills (2000) 76 SASR 404; Matulich v Police [2007] SASC 440; R v Stubberfield (2010) 106 SASR 91; R v Afford (unreported, Supreme Court of South Australia, Court of Criminal Appeal, No 8 of 1984); SA Police v John (1995) 181 LSJS 51; R v Jennings (1996) 187 LSJS 222; Cox v Betts (unreported, Supreme Court of South Australia, No 2671 of 1984); R v Allen [2005] QCA 73; R v Sheehan [2007] QCA 409; R v O'Keefe [1959] Qd R 395; Radjevic v Police (1997) 67 SASR 478; R v O'Keefe (1992) 60 A Crim R 201, discussed.
R v Wirth (1976) 14 SASR 291; R v W, TB (No 2) (2006) 94 SASR 254, considered.

R v BANDJAK
[2011] SASCFC 19
Court of Criminal Appeal: Gray, Vanstone and White JJ
GRAY J:
Introduction

This is an appeal against sentence.
Background
Peter Bandjak, the defendant and appellant, was convicted on his plea in the District Court to the offence of deception, contrary to section 139(b) of the Criminal Law Consolidation Act 1935 (SA). The maximum penalty for this offence is imprisonment for 10 years.
The defendant deceived his victim by falsely stating that he would invest $100,000.00 for her and on her behalf in an unnamed investment scheme, and by doing so dishonestly caused her to suffer a detriment in the amount of $90,000.00.
The Judge sentenced the defendant to a term of imprisonment of three years and one month. A non-parole period of two years was fixed. In determining the head sentence the Judge made a reduction on account of the plea of guilty of five months.
The defendant submitted on the appeal that the sentencing Judge proceeded on two misapprehensions of fact and that, as a consequence, his discretion miscarried. I have reached the conclusion that the defendant’s submission is well founded, that the sentence imposed should be set aside and that the defendant should be resentenced. In particular, I am of the view that the defendant should be sentenced to a term of imprisonment because of the gravity of the offending, but that having regard to his personal antecedents, his contrition and remorse, and an unusual circumstance concerning the prospect of full restitution, the sentence of imprisonment should be suspended. My reasons follow.
The circumstances of the offending were that in 2003, by deception, the defendant through false representation had a fellow employee entrust him with $100,000.00 to invest in an unidentified investment scheme. The defendant and his victim worked together at a car park in Adelaide. The defendant promised a good return and indicated that security would be available. Soon after the monies had been provided to the defendant, he returned $10,000.00 following a request from the victim. The defendant used the balance of the monies for his own purposes. The victim repeatedly made requests for repayment, but to no avail. The defendant was charged in February 2008 and entered a plea of guilty on 19 April 2010, 12 days prior to the commencement of trial.
It was complained on appeal that the sentencing Judge made two factual errors which caused the sentencing process to miscarry, causing a manifestly excessive sentence to be imposed and causing the Judge to mistakenly refuse to suspend the term of imprisonment which he imposed. In my view, the misapprehensions led the sentencing Judge to treat the defendant’s offending more seriously than was the case.
The first misapprehension relates to the following parts of the Judge’s remarks:
You were a financial advisor. Your victim worked for you. You represented to her that you could obtain an attractive interest rate for her and that you owned property which would provide security. Your representations were false.
…
…[L]ittle significance can be attached to your previous good character because your apparent respectability obviously enabled you to gain your victim’s trust, and those who occupy positions such as that which you occupied, and who might be minded to do what you did, must be deterred from doing so.
The defendant was not a financial advisor at the time of the offending. The victim did not work for the defendant. They were simply colleagues. Were the Judge’s statements above correct, the offence would be coloured by an abuse of power or influence by an employer over an employee. This would be an aggravating feature of the offence, and in fact seems to have been treated as such by the Judge, as can be seen by the remarks above.
The second misapprehension relates to the following portion of the Judge’s sentencing remarks:
Your victim succumbed to your representations. She sold her house for about $300,000 and in September of 2003 she gave you $100,000 to invest on her behalf and you transferred her funds into a bank account which you held in your own name.
It was complained that this reflected a factual misapprehension in that it suggested that there was some causal connection between the making of the representations and the decision of the victim to sell her house, when this was not the case. Although the passage above is not unambiguous, I am satisfied that the defendant’s submission has been made good, in particular as the evidence before the Judge suggested that the victim sold her property prior to the investment discussions between the victim and the defendant.
Resentencing
It is to be noted at the outset that when resentencing, this Court is to have regard to all relevant facts that occurred prior to the date of resentencing.[1]
[1] For example see R v W, TB (No 2) (2006) 94 SASR 254.
The defendant is a 40 year old married man with a young family. He has no prior convictions. The sentencing Judge accepted that the defendant was contrite and was unlikely to reoffend. This was not challenged on appeal. His family continue to support him. A psychiatrist considered that the defendant was experiencing symptoms of an adjustment disorder with anxiety and depression. In the view of the psychiatrist, the defendant was troubled by depressive symptoms when he confronted the reality of his behaviour.
During sentencing submissions in the Court below, the defendant expressed contrition and indicated that he wished to make restitution but did not have the ability to do so. The defendant’s wife was prepared to assist. In particular the Court was advised that she was prepared to extend the loan on the family home. However, she was only to do so if she could continue her employment as a teacher. This would only be possible if the defendant was able to look after their three young children, two of whom were of a pre-school age. This could not occur if the defendant was in custody. Accordingly, her assistance was conditioned on the sentencing Judge exercising his discretion to suspend any sentence of imprisonment that might be imposed.
An affidavit from the defendant’s spouse was tendered on the hearing of the appeal. The defendant and his wife have three sons aged seven, four and two years. Mrs Bandjak, prior to the defendant’s imprisonment in December 2010, worked in full-time employment as a teacher at a suburban school. She had done so for the previous 13 years except when on maternity and parenting leave. Following her husband’s imprisonment, she applied for and was granted leave without pay for the first term of the 2011 year. She proposes to reassess the family situation before the second term of the 2011 year and if necessary will apply for leave for that term as well. She had taken these steps to provide the necessary care for her children given the imprisonment of the defendant.
The following conditional offer of restitution made on appeal appears to be not dissimilar to that made before the sentencing Judge. The Court was informed that Mrs Bandjak was prepared, if able to resume employment, to extend the loan on the family home. That property is registered in Mrs Bandjak’s name alone. The monies to be raised through this extended loan, together with a modest amount to be advanced by the defendant’s parents, would be made available to the defendant to enable full restitution to be made. The amount raised would not only repay the $90,000.00 but also interest on that amount. It was explained to the Court that this could only take place if the defendant was able to be at home to look after the children so that Mrs Bandjak would be free to work. It was suggested that the defendant would seek to undertake further casual labouring work, when his wife was home with the children, to enable the extended loan to be met and the family home retained. Mrs Bandjak was not prepared to extend the family loan without being able to return to work. Without her income there would be a real risk that there would be a default in the repayment obligations under an extended loan. The defendant has no assets in his own name and without the assistance of his wife and parents, would be unable to make any restitution.
On the hearing of the appeal the Director did not challenge the genuineness of the position advanced by Mrs Bandjak. It was accepted that this was an entirely reasonable position for the mother of three young children to adopt. In my view the conditional offer of restitution was not only reasonable but understandable. The distress and disruption to the family with the husband and father in prison is self-evident. The need to maintain the family home is plainly in the interests of Mrs Bandjak and the children. I accept that it is only through these means that restitution can be effected.
Sections 10(1)(e) and 10(1)(f) of the Criminal Law (Sentencing) Act 1988 (SA), relevantly provide:
(1)A court, in determining sentence for an offence, should have regard to such of the following matters as are relevant and known to the court:
…
(e)     any injury, loss or damage resulting from the offence;
(f)     the degree to which the defendant has shown contrition for the offence—
(i)by taking action to make reparation for any injury, loss or damage resulting from the offence; or
(ii)     in any other manner;
I consider that the making of restitution is an important matter when considering whether good reason to suspend exists. The making of restitution would place a considerable burden on the defendant and in particular his family. Restitution cannot be made while the defendant is in custody.
The legal principles relevant to restitution were addressed in my decision in Matulich.[2] In the course of my reasons I set out the following summary of what in my view are the relevant principles:[3]
-Statutory recognition has been given to the relevance of restitution in the sentencing process through sections 10(1)(e) and 10(1)(f) of the Sentencing Act.
-These statutory provisions provide a recognition of the common law principles identified in Robertson.
-A sentencing court, as observed in Kovacevic, must treat restitution as mitigatory. This is because the making of restitution impacts directly on the extent of any loss suffered, and must be brought to account by reason of s 10(1)(e).
-The circumstances under which restitution is made may demonstrate contrition and remorse. These are matters of mitigation. As explained in Robertson, this is because contrition and remorse suggest that there are good prospects for rehabilitation.
-As observed in John, O’Keefe and Allen, restitution may be of particular significance if accompanied by circumstances of personal sacrifice. Such circumstances may lead to the suspension of a term of imprisonment, or alternatively may operate to substantially reduce the time to be spent in custody.
[2]    Matulich v Police [2007] SASC 440; see also as set out in R v Stubberfield (2010) 106 SASR 91 at [18]-[21].
[3]    Matulich v Police [2007] SASC 440 at [30] summarising the authorities set out at [21]-[29]: see R v Robertson (1984) 115 LSJS 51; Kovacevic v Mills (2000) 76 SASR 404; SA Police v John (1995) 181 LSJS 20; O’Keefe (1992) 60 A Crim R 201; R v Allen [2005] QCA 73.
At the invitation of the Court the Director of Public Prosecutions was asked to indicate an attitude to the Court suspending a sentence of imprisonment following on restitution. The Director has advised:
However if the appellant immediately and unconditionally paid into court the full amount of compensation prior to sentence being reconsidered by the Court of Criminal Appeal this would amount to a new circumstance warranting reconsideration of the Director’s attitude. If that occurred the Director’s position is that it would be open to the court to take the view that it was an indicator of contrition and remorse. It would also compensate the victim for her loss. However the degree, if any, to which any payment shows contrition and remorse must be evaluated in the light of the past failure to make any compensation and the previous attempt to make it conditional on a suspended sentence being imposed.
In these circumstances the Director’s view would be that a term of imprisonment is still warranted but suspension of that term on a bond with appropriate conditions would be open to the sentencing court.
It might be said that the weight of authority in circumstances where someone other than the defendant makes an offer to pay restitution, lies with the proposition that a court should not condone the purchase of a defendant’s release from prison.[4] However, the authorities on point, in my view, demonstrate that the fact that someone other than the defendant makes the offer to pay restitution is not alone determinative of refusing to suspend a term of imprisonment.
[4] R v Writh (1976) 14 SASR 291.
The offer of full restitution means that a victim who has suffered loss as a result of the offending, will be restored substantially to the position they were in before the offending.[5] In Radjevic,[6] Debelle J considered that although it was undesirable for a person to make an offer of restitution after having had a sentence of imprisonment imposed on him and with a view to seeking suspension of that term, particularly in circumstances where the funds are not provided directly by the defendant, the circumstances in that case called for acceptance of the offer to make full restitution as an important factor in determining whether or not to suspend the term of imprisonment. Although in that decision the defendant had undertaken to repay the money being offered by the third party, I consider that the reasoning and the remarks of Debelle J remain pertinent to the present proceeding. In particular, his Honour there observed:[7]
It is to be noted also that in this case, unlike Robertson, the appellants are not making restitution from their own funds but from borrowed funds. They will of course be required to pay those funds but the immediate restitution is not from their own pocket. However, the reality is that if the appellants are required to serve a period of imprisonment, restitution will be considerably delayed. There must also be a real risk that the restitution will not be paid in full. The benefit to the victims is of such a nature that the court should not adopt a course which prevents the prompt receipt of that benefit.
[emphasis added]
[5]    See R v Robertson (1984) 115 LSJS 51 at 53; see also Radjevic v Police (1997) 67 SASR 478 at 481.
[6]    Radjevic v Police (1997) 67 SASR 478.
[7]    Radjevic v Police (1997) 67 SASR 478 at 482.
The benefit to the victim in the within proceeding of the offer of full restitution is obvious and should not be overlooked. Furthermore, the defendant himself is not in a position to personally make the offer of restitution, and it might be said that this is often the case in offending of this nature.[8]
[8] See also Radjevic v Police (1997) 67 SASR 478 at 482.
In Radjevic,[9] the appellants had made an offer of full restitution in circumstances where pending appeal, the appellants were able to obtain a loan through an employer, enabling them to make the offer of restitution only if they were not required to serve an immediate term of imprisonment. In concluding that the sentence should be suspended, Debelle J further reasoned:[10]
If it were not for the fact that the victims will be in a position to receive immediate compensation if the offer to lend these funds is accepted, I would have been very loath to interfere with the sentence. Restitution does not automatically entitle an offender to suspension of a sentence. As [counsel], who appeared for the respondent, properly emphasised in the course of his argument, if a very substantial sum of money is stolen or otherwise dishonestly obtained, it might be absurd, in certain circumstances, to suggest that there will not be a period of imprisonment. He asked, rhetorically, if a person who had dishonestly obtained $1 million were in a position to make restitution, is he entitled to the suspension of the sentence? Further, it is plainly undesirable that a person, who has been guilty of a deliberate and serious scheme of dishonesty, should make an offer of restitution after having had a sentence of imprisonment imposed upon him and with a view to seeking suspension of that term of imprisonment.
…
In addition, it is unusual for a person, who has been found guilty of dishonest conduct of this kind, to be in a position to make full restitution. Regard must also be had to the fact that no doubt Mr Kaucic has assessed the capacity of the appellants to repay him, so that at the end of the day they will be the persons who in fact make restitution.
I emphasise the unusual circumstances in this case and I am encouraged to engage in the course which I propose to adopt because of its unusual nature. The court will always be careful to ensure that the sentencing processes are not abused by persons seeking to make restitution after they have heard the penalty imposed upon them.
There are further factors which must be placed in the balance. The appellants now have full-time employment. They are seeking part-time employment to supplement their income. Obviously the prospects of rehabilitation are so much greater if the appellants are engaged in gainful employment than if they are serving a period of imprisonment.
In addition, the prospects of rehabilitation are good. That opinion is expressed by the psychiatrist who examined them. They also come to court with good references from members of the Serbian community. As the magistrate found, they are respected members of that community in Melbourne. Further, the appellants have a positive inducement to comply with the law, given the fact that the sentence of imprisonment will be suspended upon them entering into the bond to be of good behaviour.
[9] Radjevic v Police (1997) 67 SASR 478.
[10] Radjevic v Police (1997) 67 SASR 478 at 482.

In Robertson,[11] King CJ, with whom the other members of the Court agreed, said:[12]
The [reparation] is important in another way because it shows that the appellant has made use of the time which he has had since he has been on bail to rehabilitate himself by working, and working hard, and making good use of the money which he has earned for the benefit of those whose money he had taken. This augurs well for his rehabilitation and gives this Court some ground for extending a leniency to him which was not available to the learned sentencing judge. I think that the combination of these two aspects of the new factor is sufficient to enable this court to intervene, bearing in mind that the appellant was in gaol from the date upon which he was remanded for sentence, 13 March 1984, to the date on which he was released on bail, 9 May 1984, a period of two months.
[11] R v Robertson (1984) 115 LSJS 51.
[12] R v Robertson (1984) 115 LSJS 51 at 53.
It is also worth further mentioning the decision of the Criminal Court of Appeal in Kovacevic v Mills,[13] where as mentioned above, it was held, inter alia, that a sentencing court must treat restitution as mitigatory. Reference was made to the decision of Debelle J in Radjevic, and in particular to the fact that, despite the money being borrowed in that case, Debelle J had regarded reparation favourably. The money had also been borrowed in Kovacevic, where the making of reparation was considered an important factor in the circumstances of that case, and that it should be acknowledged in a positive way in the sentencing process. The Court considered that “standing alone, it should not be regarded as decisive, but along with the other matters which have been mentioned, it justifies an order for immediate release”.[14]
[13] Kovacevic v Mills (2000) 76 SASR 404 (Doyle CJ, Mullighan, Williams, Bleby and Martin JJ).
[14] Kovacevic v Mills (2000) 76 SASR 404 [81]-[82].
The fact that a defendant has to work hard to pay money, or in the case of a loan, to repay a loan, is part of the rationale underlying the court’s approach to offers of restitution.[15] That is, such undertakings are seen as a burden and a punishment. It might be said that the basis of this rationale is removed if the defendant does not suffer a significant burden as described. Although the defendant in the within proceeding has not himself undertaken to be liable to repay the extension of the loan on the family home, apart from the fact that he is simply not in a position to do so, I consider that he nevertheless is, with his wife, exposed, at least indirectly, to the extra financial burden and the consequent need for his wife to return to work and he himself to undertake significant family duties and the possibility of casual labouring work.
[15] For example see R v Writh (1976) 14 SASR 291; see also R v Robertson (1984) 115 LSJS 51 at 53.
In arriving at my decision, I observe that the defendant has been in custody for some three months. In accordance with its usual practice, as the defendant has been convicted of an offence not involving violence, the prison authority will consider his eligibility for home detention release once half of the non-parole period has been served. In other words, the defendant can have an expectation of home detention release in a matter of months.
Having regard to the foregoing I would, before delivering judgment, advise the parties of my decision to allow the defendant to pay the amount of restitution including interest into Court. In this way, full restitution will be effected before the appeal is allowed and the defendant resentenced as discussed above.
I would resentence the defendant to a term of imprisonment of two years. I would fix a non-parole period of 15 months. I consider that the offer of restitution, as analysed above, along with the defendant’s good history, personal circumstances, and the unlikelihood of him re-offending, provide good reason to suspend the sentence. I would, subject to payment into Court of the monies to effect restitution, suspend this sentence on the defendant entering into a three-year supervised good behaviour bond.
I consider that allowing full restitution to be made and suspending the sentence will lead to a just result in the present case. The defendant will have been sentenced to a term of imprisonment, he will have served some months in custody and he will be subject to a suspended sentence good behaviour bond for three years. A substantial financial burden of more than $120,000.00 will have been incurred in effecting restitution. I consider that any member of the public would treat such a sentence as providing appropriate general deterrence. Insofar as personal deterrence remains a consideration I consider that the proposed sentence would provide that deterrence.
Conclusion
I would allow the appeal and set aside the sentence imposed by the sentencing Judge. I would resentence the defendant to a term of imprisonment of two years. I would fix a non-parole period of 15 months. I would suspend that sentence on the defendant entering into a three-year supervised good behaviour bond.
However, before making any formal orders I would require the payment to Court of the amount of $121,000.00 so that restitution can be effected. In the event that the payment into Court is not made within three weeks, I would sentence the defendant to a term of imprisonment of two years with a non-parole period of 15 months, but would decline to suspend the sentence.
VANSTONE J: The appellant pleaded guilty in the District Court to one count of deception, contrary to s 139(b) of the Criminal Law Consolidation Act 1935. It was alleged that he deceived the victim by falsely telling her that he would invest the sum of $100,000 on her behalf and, by so doing, dishonestly caused her to suffer a detriment to the extent of $90,000. The maximum penalty for the offence is imprisonment for ten years.
At the time of sentence, the appellant was 40 years of age and had no prior convictions. He was sentenced to imprisonment for three years and one month with a non-parole period of two years. The judge indicated that, but for the plea of guilty, the head sentence would have been three years and six months.
He appeals against the sentence arguing that the factual basis upon which he was sentenced was incorrect in two particulars and that this led to a higher sentence than the true facts warranted.
Background
It is common ground that the victim and the appellant met through the course of their work at a parking station in Hindley Street, Adelaide. The victim was employed there as a cashier. In July 2003 the appellant commenced employment as some sort of security officer, his duties being to walk about the parking station checking the security of parked vehicles.
Over the ensuing months the appellant and victim had several conversations about investments. He led her to believe that he was a financial adviser and was astute in relation to investing funds. At about this time the victim sold a property in Sydney and was in receipt of a substantial amount of money from the proceeds. She told him she had money to invest. The appellant suggested that she could invest some of the money with him and would be guaranteed a return of 10 per cent per annum. He made representations to her to the effect that he was a man of means himself and would use his own assets to repay her should anything go wrong. In September 2003 the victim gave the appellant $100,000. They signed a loan agreement and he gave her a document headed “Deed of Assignment”, purportedly to protect her. During the following month, at the victim’s request, the appellant repaid $10,000. Soon after this the appellant left his employment, telling the victim that he was going to work as a financial adviser and giving her a business card associating him with an entity called “Professional Choice Financial Services”.
On a number of occasions in 2004 through to 2006 the victim contacted the appellant enquiring about her money. Many times she was given assurances that it would be repaid. In January 2007 the appellant gave the victim a cheque in the sum of $120,000, but upon presentation it was not honoured. It appears that much of the funds advanced by the victim were used by the appellant to further his own ends. Perhaps a quarter of it was applied to speculative investments in his own name.
None of the outstanding $90,000 has been recovered. It is apparent that the appellant has no funds of his own which could be applied to restitution. Mr A Crocker, for the appellant, put to the sentencing judge and to this Court that there was some prospect of restitution being made by the appellant’s wife, but it would only occur if the payment were made the subject of a condition of a bond associated with a suspended sentence. It appears that the appellant’s wife brought her own funds into the marriage and was prepared to raise a loan on her house property; but only if the appellant were free to seek work or to support his wife in her own work.
Arguments on appeal
Central to the argument on appeal are two suggested errors made by the sentencing judge in summarising the facts of the offence. In his remarks upon sentence the judge said that the victim “… succumbed to your representations. She sold her house for about $300,000 and in September of 2003 she gave you $100,000 to invest on her behalf …”. It is suggested by Mr Crocker that this statement reflected an incorrect appreciation of the facts, inasmuch as it suggests that the victim sold her house in order to raise funds to invest with the appellant. That this is the correct interpretation is rather fortified by a question asked of counsel on one of the many occasions when submissions were made on the appellant’s behalf. On that occasion the judge asked what was the value of the property the victim sold in order to finance the investment. Unfortunately neither Mr Ford, who then appeared for the prosecution, nor Mr Crocker, corrected what seemed to be a clear misapprehension of the facts by the judge.
The second suggested error is of greater significance. The judge said that the appellant was a financial adviser and that the victim worked for him. As can be seen from what I have said, neither of these matters was correct. In my view this second misunderstanding was an important one. If the appellant had indeed been a financial adviser who employed the victim and if he had used that position of authority and supposed expertise to encourage the victim to invest monies with him, that would have given a particularly serious flavour to the offence. It was serious enough without that added dimension. However, it appears to me that the judge viewed the offence as being aggravated by this misapprehended circumstance. The sentence imposed indicates to me that the judge placed some weight on this matter.
I consider that in light of these errors it is appropriate to sentence afresh.
Conclusion
At the outset I should say that I am not impressed by the offer of restitution, conditional as it is upon the Court suspending the sentence of imprisonment. Of course it is desirable to see victims recover losses arising from crimes against them. However, I do not think this Court should be seen to succumb to pressure such as that which appears to me to have been applied to the sentencing judge and echoed in this Court. I might add that this is not a case where restitution, if made, would come at much cost to the appellant. It would not be his funds which would be repaid to the victim. It is hard to see much value in terms of contrition in the offer, such as it is. Moreover, many years have passed since this offence was committed and almost a year since the plea of guilty was entered. If the appellant was genuine in his wish to make good at least some of the victim’s losses, it seems to me that something tangible would have been achieved by now. Accordingly, I disregard his offer of restitution.
As I have said, this was a serious offence. A substantial amount of money was involved. The impact upon the victim will be profound and ongoing. Nevertheless, as has been put, this is not a case of breach of trust nor does it involve a course of conduct as seen in many matters of this nature.
I consider an appropriate starting point to be a sentence of two and a half years. I would deduct from that three months on account of the late plea of guilty. Against the head sentence of two years and three months I would set a non-parole period of sixteen months.
Like the judge under appeal, I am of the view that, notwithstanding the appellant’s previous good record, it would be inappropriate to suspend the sentence. Despite the inevitable difficulties accruing to the appellant’s wife and children as a result of his imprisonment, I can find no good reason to do so.
Orders
I would make the following orders:
1. allow the appeal;
2. set aside the sentence under appeal;
3.impose a sentence of imprisonment of two years and three months with a non-parole period of sixteen months;
4.order that the sentence be taken to have commenced on 7 December 2010.
WHITE J: Following a late plea of guilty the appellant was sentenced in the District Court for one offence of deception.[16] Over a period of some weeks concluding on about 27 September 2003, the appellant deceived his victim by inducing her to lend him $100,000 on the pretext that he would invest that sum on her behalf so as to produce a return of 10 per cent each year. Since that time, the appellant has repaid only $10,000.
[16] Contrary to s 139(b) of the Criminal Law Consolidation Act 1935 (SA) (CLCA).
A District Court Judge sentenced the appellant to imprisonment for three years and one month. Had it not been for the plea of guilty, the sentence would have been three years and six months. The Judge fixed a non‑parole period of two years.
Background Circumstances
In September 2003, the appellant was employed performing security work at a carpark. He had previously had some work as a financial advisor.
The appellant’s victim was a cashier, then aged 59 years, working at the same carpark. She had some money to invest having recently sold a property in Sydney. The appellant told her that he could invest the money for her so as to obtain a good return and gave assurances about the safety of the investment. She trusted him.
The victim and the appellant signed a loan agreement providing for a loan from the victim to the appellant of $100,000 for a period of 12 months at an interest rate of 10 per cent. In addition, the appellant provided the victim with a “Deed of Assignment”, apparently with a view to indicating the security for her investment. The Deed of Assignment and the provisions in the loan agreement regarding security were passing simulations which provided no security at all. It is evident that the appellant took advantage of the victim’s lack of sophistication in relation to investment.
Instead of investing the monies on the victim’s behalf, the appellant treated the money as his own. With the exception of $10,000 which, at the victim’s request, the appellant repaid shortly after the initial loan, he used the balance to discharge his own debts and to make imprudent speculative investments in his own name. The victim’s monies were thereby entirely lost. This was significant for her as she had intended the $100,000 to be her retirement nest egg.
Between 2004 and late 2007, the victim repeatedly sought repayment. On each occasion, the appellant would fob her off using a variety of stratagems which involved further deception. In late 2007 the appellant wrote a cheque to the victim for $120,000, but the cheque was dishonoured.
The appellant was arrested and charged in February 2008. He pleaded not guilty and the charge was listed for trial on 19 April 2010. Some 12 days before the trial was to commence, the appellant indicated that he would now plead guilty, and he entered that plea on 19 April 2010.
The victim has lost $90,000 of the principal sum. The appellant has made no restitution at all.
The appellant is 40 years of age, married with three children aged seven, four and two years respectively. His wife was not involved in his offending at all and had no knowledge of it until his arrest in February 2008. Even then the appellant kept the full details of his conduct from her. Neither the appellant’s wife nor his children received any benefit from the loan proceeds.
In the sentencing submissions the appellant was described as a man of straw. The family home is owned by his wife, she having purchased it before marrying the appellant in 2002. The home is subject to a mortgage.
The Judge was told that if the appellant received a suspended sentence of imprisonment his wife would be able (and willing) to increase her borrowings so that substantial restitution could be made to the victim. However, if the sentence was not suspended she would not be able to do so because the income which would otherwise be used to meet the additional borrowings would have to be expended meeting the costs of childcare while the appellant was in custody. In addition to the prospect of restitution from additional borrowings by the appellant’s wife, the sentencing Judge was also told that the appellant’s parents were prepared to contribute a small sum for this purpose.
The appellant also submitted to the Judge that an immediate custodial sentence would cause undue hardship to his family. This is because the appellant’s wife is the breadwinner in the family with the appellant carrying out the role of home carer. There are no family members who can replace the appellant in caring for the younger children with the effect that, in order to continue her employment, the appellant’s wife would incur significant childcare costs.
The Judge declined to suspend the sentence. Although recognising the reality of the hardship which the appellant’s imprisonment would cause his family, the Judge did not consider that that hardship was so exceptional as to constitute good reason for suspension.
Errors in the Sentencing
The Judge’s sentencing remarks indicate two misapprehensions about the circumstances of the appellant’s offence. The Judge commenced his remarks by saying:
You were a financial advisor. Your victim worked for you. You represented to her that you could obtain an attractive interest rate for her and that you owned property which would provide security. Your representations were false.
Your victim succumbed to your representations. She sold her house for about $300,000 and in September of 2003 she gave you $100,000 to invest on her behalf and you transferred her funds into a bank account which you held in your own name.
Later in his remarks the Judge said:
[L]ittle significance can be attached to your previous good character because your apparent respectability obviously enabled you to gain your victim’s trust, and those who occupy positions such as that which you occupied, and who might be minded to do what you did, must be deterred from doing so.
(Emphasis added)
The “position” to which the Judge referred in the second passage just quoted must be the position of financial advisor employing the victim to which the Judge referred at the commencement of his reasons.
The Judge was mistaken in thinking that the victim worked for the appellant at all, let alone in his capacity as a financial advisor. As noted earlier, they were co-workers in a carparking station.
The appellant submitted that the Judge had made a second mistake in the passage commencing “Your victim succumbed to your representations”. That passage indicated, it was submitted, that the Judge considered that the appellant had, as part of the deception, persuaded the victim to sell her property so as to release funds for investment. In fact, the evidence indicates that the sale by the victim of her Sydney property occurred before she and the appellant had commenced discussing investments.

The passage in question is ambiguous in that it could also be construed as a recording of the bare historical facts, without implying any causal relationship between the appellant’s representations, on the one hand, and the sale of the Sydney property, on the other. However, I am satisfied that the appellant’s submission about the Judge’s misapprehension in this respect should be accepted. That the Judge did have a mistaken belief in this respect is confirmed by a question which he asked of the prosecution counsel during the sentencing submissions:
What was the value of the property the victim sold in order to finance the investment?
It is unfortunate that the Judge’s misapprehension was not corrected at that time, but it is understandable that it was not. The focus of the Judge’s question was on the value of the property sold, rather than on the reasons for its sale.
The Judge’s misapprehensions about these circumstances are material. The appellant’s conduct would, objectively, be much more grave if he had abused his position as a paid financial advisor, or had taken advantage of the trust and confidence implicit in an employment relationship and the opportunity for influence which that relationship provides, in order to effect his deception. In addition, his deception would have to be viewed much more seriously if it involved inducing the victim to forego a secure real estate investment (with the prospect of real appreciation in value) in order to invest monies with him.
Even without these features, the appellant’s conduct is still to be viewed gravely but it was not aggravated by the circumstances to which the Judge mistakenly referred. This means, in my opinion, that the sentencing discretion has miscarried and that this Court should re-sentence.
Re-sentencing
As the appellant’s counsel has acknowledged, a sentence of imprisonment in this case is inevitable. The appellant’s conduct was serious, involving the premeditated and planned deception of a friend who lacked sophistication in relation to investments. The deception took place over some weeks and the appellant had no intention at all of investing the monies in the way which he had represented to the victim. He has deprived the victim effectively of her retirement savings, and the continuing hardship which that is causing is very understandable.
The appellant is to be sentenced only for the deception which occurred in September 2003, and not for his subsequent conduct in misleading the victim about repayment. However, the dishonesty involved in that conduct does mean that lenience cannot be extended to the appellant on account of contrition or remorse in the same period.
The appellant has not apologised to the victim. The sentencing Judge was prepared to infer that the appellant’s discussions with his wife concerning a possible extension of their home loan so as to make some restitution did indicate a significant degree of contrition and remorse on his part. I do not share that view. The appellant’s actions speak loudly. Between September 2004, when repayment of the loan became due, and his arrest in February 2008, the appellant had made no genuine attempt at all to repay any money to the victim. On the contrary, he continued to deceive her.
Even since his arrest in February 2008, the appellant has taken no steps to address the wrongfulness of his conduct. He has, for example, kept his own vehicle (said to be worth $9,000) and, although he continued in some paid work until December 2009, did not make any partial or periodic payment from his wages. The initiative for increased borrowings on the family home seems to have emanated from his wife after she learnt (only a few weeks before his change of plea) of the full extent of his conduct and was thereby alerted to the difficulties in providing proper care for their children which the appellant’s imminent imprisonment would involve.
The appellant’s incarceration is causing real difficulties for his family. Because of the appellant’s imprisonment his wife has taken leave from her job as a teacher so as to be able to care for the children. The family is now subsisting on Centrelink benefits. That position is unlikely to change until the appellant is released from prison. There is of course only a limited extent to which factors such as this can be taken into account.[17]
[17] R v Wirth (1976) 14 SASR 291.
I consider that the appellant should be sentenced to imprisonment for two years and three months. Had it not been for the late plea of guilty, I would have thought a sentence of imprisonment for two and a half years to be appropriate. I would fix a non‑parole period of 16 months.
Suspension and Restitution
The appellant’s counsel submitted on appeal that the sentence should be suspended upon the appellant entering into a bond containing a condition that he pay into Court the sum of $120,000 which could then be paid to the victim. The submission involved two alternatives: first, that the appellant not be released until the sum of $120,000 is paid into Court; and secondly, that he be released on a condition that the bond be revoked if the sum of $120,000 is not paid into Court within a specified time after the release.
The Court was told that the appellant’s wife is prepared to increase the borrowings secured by the family home so that, together with the small sum to be contributed by the appellant’s parents, the sum of $120,000 could be paid into Court. However, it was also made plain that the appellant’s wife was prepared to do this only if the appellant’s sentence is suspended. Counsel explained that this is because of the financial constraints to which I referred earlier. She is not able to incur additional borrowing costs if she must, at the same time, continue to pay additional childcare costs by reason of her husband not being able to fulfil his role as the home carer.
The making of restitution, or an offer to make restitution, may be relevant to sentencing in a number of ways. Section 10(1) of the Criminal Law (Sentencing) Act 1988 (SA) (the Sentencing Act) requires the Court to have regard to the personal circumstances of the victim of the offence (sub-para (d)); any injury, loss or damage resulting from his offence (sub-para (e)); and the degree to which the appellant has shown contrition for the offence by taking action to make reparation for any injury, loss or damage resulting from the offence (sub-para (f)). Restitution can be relevant to each of these matters. Section 10(1)(f) does not make restitution by itself a relevant matter. Instead, what is relevant is the evidence which it may provide in a real way of the degree of the appellant’s contrition.
The significance to be attached to actual steps taken by a defendant to make reparation, and to offers to take such steps, have been discussed in several authorities (both before and after the enactment in 1988 of the Sentencing Act). The relevant principles can be summarised as follows:
1.The making of restitution is always a relevant matter (R v Wirth[18]) and is mitigatory. This Court in R v Robertson[19] spoke of the significance of restitution in the following passage:
[18] (1976) 14 SASR 291 at 294; Kovacevic v Mills [2000] SASC 106; (2000) 76 SASR 404; Matulich v Police [2007] SASC 440. See also R v Stubberfield [2010] SASC 9 at [18]-[21]; (2010) 106 SASR 91 at 98-9.
[19] (1984) 115 LSJS 51.
[Full restitution] is a very important fact from more than one point of view. It means that the persons who have suffered loss as a result of the crimes will be restored to the position in which they were before they lost their money and will have suffered only to the extent of any inconvenience and emotional upset which was caused to them and any interest which they might lose as a result of not having the use of the money.[20]
[20] Ibid at 53 (King CJ with whom Zelling and White JJ agreed).
2.It is the consistent policy of Courts to encourage the making of restitution: R v Afford;[21] SA Police v John.[22]
[21] Unreported, Supreme Court of South Australia, Court of Criminal Appeal, CCA No 8 of 1984 (King CJ).
[22] (1995) 181 LSJS 20 at 22.
3.Apart from providing some reparation to the victim, and being an indication of contrition, restitution out of the defendant’s own resources also means that he or she has not profited from the crime: R v Afford.[23]
[23] Unreported, Supreme Court of South Australia, Court of Criminal Appeal, CCA No 8 of 1984 (King CJ).
4.The making of restitution will usually be evidence of remorse: R v Wirth.[24] In particular, a defendant’s willingness to work long hours and to assume heavy burdens in order to make reparation will usually be good evidence of remorse: R v Wirth.[25]
[24] (1976) 14 SASR 291 at 294.
[25] Ibid.
5.There are limits on the extent to which leniency should be granted when a defendant’s family or friends assist in making the restitution because, in such circumstances, there may simply be a shift of the burden of the crime from the original victim to persons other than the defendant: R v Jennings;[26] R v Wirth.[27]
6.However, the fact that others are willing to supply the funds used in making restitution does not mean that the reparation is of no significance in the sentencing. The making good of the victim’s loss is an important factor and the fact that others are prepared to do this may speak in favour of the defendant’s intrinsic worth: R v Wirth;[28] SA Police v John.[29]
7.Courts should be alert not to permit defendants in effect to buy, or appear to buy, suspension of a term of imprisonment by making, or by offering to make, reparation for their offence: Cox v Betts;[30] Kovacevic v Mills.[31] In R v Allen[32] McMurdo P spoke of this consideration saying:
Whilst courts would never allow wealthy offenders with the capacity to pay compensation to buy their way out of an appropriate custodial sentence, restitution is, as the respondent concedes, a relevant mitigating factor in that it compensates the victim and benefits society and is often, as here, a tangible demonstration of genuine remorse.[33]
8.Courts view offers made for the first time during the course of sentencing submissions to make restitution with some circumspection. Stanley J (with whom Wanstall and Stable JJ agreed) in the Queensland case of R v O’Keefe said:
It would be of the worst example if any sentence induced or tended to induce a belief that offenders would escape punishment if, when convicted, they made or offered to make restitution. Offenders cannot bargain with the court, and, in effect buy themselves out of sentences.[34]
Nevertheless, as the decision in O’Keefe itself shows, if the Court is satisfied about the genuineness of the offered restitution it may be a very relevant consideration in the sentencing.[35]
9.In an appropriate case it may be appropriate for a court to defer sentencing so as to permit a defendant to make good an offer made in the course of the sentencing submissions by paying into court the amounts necessary to make proper restitution. The circumstances (described by Debelle J as “unusual circumstances”) in Radjevic v Police[36] provide an example.
[26] (1996) 187 LSJS 222 at 226.
[27] (1976) 14 SASR 291 at 295.
[28] Ibid at 295.
[29] (1995) 181 LSJS 20 at 22.
[30] Unreported, Supreme Court of South Australia, No 2671 of 1984 (Olsson J).
[31] [2000] SASC 106 at [81]; (2000) 76 SASR 404 at 421.
[32] [2005] QCA 73.
[33] See also R v Sheehan [2007] QCA 409.
[34] [1959] Qd R 395 at 400.
[35] Ibid at 401.
[36] (1997) 67 SASR 478.
An example of the significance which may be attached to the making of restitution is seen in the New South Wales case of R v O’Keefe.[37] Lee J (with whom Gleeson CJ and Priestley JA agreed) said:
[T]he really significant factor is that this is a case in which the applicant has done everything humanly possible to undo the wrong which she has done. She has, over a period of time, sought to obtain a loan for the full amount. She has obtained it and she has paid the money back. She has placed upon her shoulders a debt which will be with her for another 15 years. She herself, although she has clerical qualifications, can earn an income possibly of $20,000. Her husband is a truck driver who can contribute the modest $450 only and it is quite apparent that those two persons, even jointly, will have a very difficult time ahead in meeting the demands over the period in question.
She has in fact undertaken to sacrifice her own interest for the benefit of the person whom she has defrauded and that is the circumstance in my view which is really significant in this case. One often strikes cases involving this class of offence where promises are made that money will be paid. Sometimes those promises are fulfilled. One strikes cases where them money is repaid but not by the sacrifice of the applicant, but by the intervention of a father or a relative or a close friend.
This case therefore does stand in a very exceptional light and in my view the sentence imposed, although a comparatively light sentence in the light of the money involved, is altogether too high in regard to this applicant.[38]
The circumstances of the present case contrast markedly with those just described by Lee J.
[37] (1992) 60 A Crim R 201.
[38] Ibid at 204-5.
In the present case, I do not consider that the appellant’s wife’s offer is indicative of remorse or contrition by the appellant. Although he told the psychiatrist to whom he was referred in connection with the sentencing submissions that he regrets his conduct, there is no evidence of him having made any apology to his victim.
The initiative for the restitution offer appears to come from his wife and not from the appellant. The appellant’s wife is in a very difficult position, both emotionally and financially. The difficulties which she is experiencing in trying to care for a young family suddenly deprived of their father, while at the same time maintaining the employment which is the source of the family income are understandable. However, it is difficult to regard her offer as a genuine expression of the appellant’s own contrition. I also note that if the Court was to act on the offer, its effect, substantially would be to shift the burden of the appellant’s offence from the original victim to his wife and, to a lesser extent, his parents.
Like the sentencing Judge, I am conscious of the predicament of the appellant’s wife. However, the difficulties which she is facing are of a type experienced by many persons when a family member is imprisoned. They are an almost inevitable consequence of imprisonment.
In all the circumstances, although the appellant’s wife may not intend subjectively to bargain with the Court for the appellant’s release, that is the effect of the offer. For the reasons given in the authorities, the Court should not countenance the purchase of the appellant’s release.
Accordingly, I do not consider that there is good reason for suspension of the appellant’s sentence.
Conclusion
For the reasons given above, I would allow the appeal and set aside the Judge’s sentence. In its place I would impose a sentence of two years and three months and fix a non‑parole period of 16 months. The sentence is to be taken to have commenced on 7 December 2010.