R v Brian Roy DAVIES No. SCCRM 96/56 Judgment No. 5756 Number of Pages 6 Criminal Law

[1996] SASC 5756

COURT IN THE COURT OF CRIMINAL APPEAL OF SOUTH AUSTRALIA DOYLE CJ(1), COX(2) AND BOLLEN(3) JJ

CWDS
Criminal law - jurisdiction, practice and procedure - judgment and punishment - Crown appeal - need to maintain standards of sentencing - need to correct manifest inadequacy. Everett v R (1994) 181 CLR 295, applied.

HRNG ADELAIDE, 15 July 1996 #DATE 14:8:1996

Counsel for appellant:     Ms W Abraham

Solicitors for appellant:    DPP (SA)

Counsel for respondent:     Mr R Halliday with Ms N Symons

Solicitors for respondent: Alderman Consultant Solicitors

ORDER
Appeal allowed.

JUDGE1 DOYLE CJ
1. In my opinion leave to appeal should be granted to the Director of Public Prosecutions, the appeal should be allowed and a new non-parole period of four years should be fixed. I agree with the reasons given by Cox J for doing so.

2. I wish to add just this. In Everett v The Queen (1994) 181 CLR 295 the High Court made it clear that the grant to the prosecution of leave to appeal against a sentence imposed by a criminal court is something which will be given only in the rare and exceptional case. The court went on to indicate that leave should be granted only when it was necessary to do so to lay down some point of principle. Leave should not be granted merely because the sentence imposed is seen to be inadequate. However, the court added (at 300) that there could be cases of "manifest inadequacy" or inconsistency in sentencing standards which would give rise to an error of principle warranting correction by a Court of Criminal Appeal.

3. There are two matters in this case which I would identify as warranting the grant of leave. The first point is that, in cases such as this, deterrence 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.

4. In my opinion this was also an instance of manifest inadequacy or inconsistency in sentencing standards. If an offender such as the respondent, who has committed offences of such magnitude over a long period of time, can escape with a non- parole period as low as two and a half years, there would seem to be no scope for adequate punishment of an offender who does plead guilty and who demonstrates contrition. In short, in my opinion, the non-parole period was manifestly inadequate and calls for correction.

5. I add that, like Cox J, I consider that the court may well have to review the standards of punishment appropriate for systematic breaches of trust of the kind committed by this respondent when large amounts of money are involved.

JUDGE2 COX J
6. The respondent to this application was tried by a Judge of this Court, sitting alone, on eighteen counts of fraudulent conversion: Criminal Law Consolidation Acts184. He pleaded guilty to five of the charges in the middle of the trial, and at the end of it he was convicted of the other thirteen. He then asked that a further similar charge be taken into account. The total amount of money converted was $492,000. The Judge imposed a single sentence of six years' imprisonment with a non-parole period of two and half years. The Crown seeks leave to appeal against the sentence on the ground that it was inadequate.

7. The accused is a chartered accountant. The victim of his frauds was an elderly woman of great wealth whom I shall call X. She had no business acumen and was not really interested in the management of her affairs. The respondent was her accountant and financial adviser and she relied heavily upon him, just as her husband (Mr X) had before he died in 1987. The respondent was an executor of Mr X's estate in which X had a life interest, and he also held powers of attorney for X. The prosecution case was that the respondent used his position of trust to siphon large amounts of money from X's assets to the benefit of himself or his family company or certain private trading companies in which he had a direct or indirect financial interest. The details of the crimes do not matter now. The Crown alleged that there were eighteen defalcations from early 1981 until April 1993 and that they only stopped because one of the respondent's partners discovered some irregularities in transactions involving the family company. The respondent's answer to the charges was that he had X's authority to invest her money as he saw fit, including an authority to borrow money for himself or his company, and at any rate that he was not acting dishonestly. He changed his plea on five counts during the trial and as to the others the learned Judge disbelieved him. He found that the accused was acting without authority and dishonestly and that he knew that he was acting without authority and dishonestly.

8. The nineteenth offence, which the Judge was asked after the trial to take into account when sentencing the respondent, involved the fraudulent payment of $70,000 to a particular company in August 1993, after the other matters had come to light and the respondent had been told expressly not to make any further payments from X's account to that company.

9. The respondent was fifty-two years of age when he was sentenced. He has spent his working life as a chartered accountant and he was earning a substantial income. He had no previous convictions and he called some impressive character evidence. The matter of restitution was a little unclear, because the respondent owes X substantial sums independently of these frauds, but it seems realistic to say that only $50,000 of this $492,000 has been repaid to X. The financial consequences for the other members of the respondent's professional firm are still uncertain but will undoubtedly be considerable. The learned sentencing Judge acknowledged that deterrence is the dominant factor in sentencing for this type of crime. He considered that the August 1993 offence was committed in circumstances of considerable aggravation, but he decided to ignore that aspect of the matter because the respondent had admitted the offence and was also entitled to credit for the five pleas of guilty entered in the course of the trial. Taking all those matters into account his Honour, as I have said, fixed on a sentence of six years' imprisonment with a non-parole period of two and half years.

10. The Director complains that both the head sentence and the non-parole period were inadequate having regard to the totality of the offending and the need for general deterrence. He also says there is a matter of principle involved relating to the discount applicable to the pleas of guilty entered during the trial.

11. Ms Abraham, for the Director, emphasized the sustained nature of the offending and the large amount of money that was taken, the breach of trust with respect to a victim who was known to be vulnerable, the motive of greed with no semblance of need, and the effect as well on the appellant's former professional partners or co-directors. She argued that the respondent's sentence was lower than the standard set in this Court for large scale frauds. Mr Halliday, for the respondent, submitted that the learned Judge gave proper effect to the consideration of general deterrence but also, and correctly, took into account the significant mitigating factors that properly influenced both the head sentence and the non-parole period. He argued that in any event the Director's application did not meet the stringent requirements of a Crown appeal against sentence as stated by the High Court in Everett v The Queen (1994) 181 CLR 295.

12. One of Mr Halliday's submissions was that, although the respondent was "dishonest" within the definition in Reg v Ghosh [1982] QB 1053 - and that was a case that the Judge relied upon here - the respondent did not appreciate at the time that his conduct amounted to a criminal offence. Reliance was placed upon an observation in the Judge's sentencing remarks - "You know now how wrong your actions were." I am not sure what the learned Judge meant to convey by the word "now". He had just described the respondent as having pursued a deliberate course of deception over more than two years, and in the reasons he had published for finding the respondent guilty he expressly found, with respect to charge after charge, that what the respondent did was dishonest and known by him to be dishonest. The respondent knew that he had no authority from X to deal with her funds in the way he did. Expressed in the terms of Reg v Ghosh, the Judge was finding that what the respondent did on each of these nineteen occasions was dishonest according to the ordinary standards of reasonable and honest people and also that the respondent realized that what he was doing was dishonest by those standards. Given the respondent's admitted actions, coupled with his state of mind as found by the trial Judge, I think it incredible that (to quote Mr Halliday) "he did not appreciate that his conduct amount to criminal offences." There may well be in the commercial world grey areas in which conduct that is generally regarded as morally reprehensible does not necessarily amount to a criminal offence, but that could not possibly describe the situation in this case. No experienced accountant could think for a moment that taking his client's money on this scale without authority and dishonestly, as Reg v Ghosh understands that term, was not a crime.

13. Looking first to the head sentence, I think there is much to be said for the Director's argument. The sentence was generous compared with the general run of comparable sentences to which we were referred, most of which were cases of defendants who pleaded guilty after cooperating with the investigating accountants, thereby saving the State a great deal of time and expense. There was no such cooperation from the respondent, and in the case of thirteen counts he maintained his innocence to the end. The last count, involving $70,000, was committed, as the learned Judge said, in circumstances of considerable aggravation, but I respectfully disagree with the Judge's view that the factor of aggravation could be set off against the five pleas of guilty that were entered during the trial. By that time there had been a lengthy Rule 9 hearing, designed to have evidence excluded, and X had already given her evidence in the trial itself. Any saving in public time and money as a result of the belated pleas would have been of little significance. It was not suggested, as it hardly could be, that the pleas could be regarded as evidence of remorse.

14. Some of the factors that I shall discuss with respect to the non-parole period also assist the Crown's submission that the head sentence was too low. However, I do not think that it was altogether outside the range of the learned Judge's sentencing discretion when judged by existing standards for large scale breaches of trust. There is a question whether that standard was too low, and I shall mention that again, but in all the circumstances I would not interfere with the head sentence.

15. However, I see the matter of the non-parole period quite differently. The period of two and a half years that the respondent is required to serve in prison is, in the circumstances, a very modest proportion of the head sentence. Certainly a greater degree of flexibility will be available to a sentencing judge when fixing a non-parole period and, even in the case of very serious crimes, it will sometimes be possible to set a low non-parole period - say, in the case of a young offender who has committed a single offence. However, there was nothing at all exceptional about the offences or the offender in this case and it was therefore necessary, in my opinion, that the non-parole period, as well as the head sentence, should reflect the gravity of the respondent's crimes and give effect to the paramount consideration of general deterrence. See The Queen v Hunter (1984) 36 SASR 101, at 103-4. The respondent had no previous convictions and he called character evidence, but both those apparently favourable matters were heavily qualified by the fact that this was a series of nineteen serious offences spread over a period of two and a half years. Furthermore, as Miss Abraham emphasized, crimes 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 circumstance that, as is almost always the case, such a defendant is unlikely to offend again.

16. In my opinion, the respondent's non-parole period was so low as to amount to appealable error, and I think the Court should intervene in order to support its sentencing standards. The test laid down in Everett's Case is satisfied.

17. I would grant leave to the Director and allow the appeal for the purpose of substituting a non-parole period of four years.

18. I have said that, in my opinion, the head sentence in this case was not outside the learned Judge's sentencing discretion when judged by existing standards for this kind of crime. There is a question whether those standards are adequate. The day after this application was argued we heard an appeal by a defendant against his sentence of seven years' imprisonment, with a non-parole period of five years, for twelve breaking offences, committed within a few weeks, which involved goods to the total value of $35,000. The defendant was a man of thirty-seven, with a fairly minor record, who had just lost his job through no fault of his own and was understandably in a state of depression. He turned to crime to supplement his very modest income. His appeal was dismissed; indeed, given the large number of offences and the tariff for repeated breaking offences, a longer sentence could probably have been justified. The defendant, like the respondent, only stopped his series of offences because he was caught. People who commit breaking offences are usually uneducated, untalented, with few advantages in life, live in a discouraging environment and are sometimes quite poor. The respondent was comfortably settled in his profession, with an income of $160,000 a year, and he committed nineteen substantial thefts (for that is what they really were), to the tune of half a million dollars in all, over a period of two and a half years. He was a fairly typical offender for this kind of crime - respected, greedy and unscrupulous. As far as moral blameworthiness is concerned, he compares quite unfavourably with the typical multiple housebreaker. I appreciate that breaking into a house is not the same as writing a cheque, and that the community is infested with housebreakers in plague proportions. Nevertheless the time may well have come, in my view, when it is necessary to revise our sentencing standards for large scale systematic breaches of trust of the kind committed by this respondent.

JUDGE3 BOLLEN J
19. I have read, in draft, the reasons of Cox J.

20. I respectfully agree with his reasoning so far as the head sentence is concerned. I respectfully agree with his comments on "standards for large scale systematic breaches of trust". But, with great respect and diffidence, I cannot agree that the non-parole period should be increased. I say no more than that I do not agree that the period is so low as to amount to appealable error. I do not think that the test in Everett has been satisfied.

21. I would refuse leave to appeal.