R v Burke

Case [2002] NSWCCA 353

NEW SOUTH WALES COURT OF CRIMINAL APPEAL

CITATION:     R v Burke [2002]  NSWCCA 353

FILE NUMBER(S):
60014/02

HEARING DATE(S):    19 July 2002

JUDGMENT DATE:      29/08/2002

PARTIES:
Regina
Kerry John Burke

JUDGMENT OF:        Giles JA Levine J Sperling J   

LOWER COURT JURISDICTION:       District Court

LOWER COURT FILE NUMBER(S):     01/51/0129

LOWER COURT JUDICIAL OFFICER:   Ducker DCJ

COUNSEL:
Mr Paul Roberts SC for the Crown
Mr Alex Shand QC for the Applicant

SOLICITORS:
Mr S E O'Connor for the Director of Public Prosecutions
James Fuggle Solicitors for the Applicant

CATCHWORDS:
Criminal Law
appeal against severity of sentence
fraudulent misappropriation
where applicant pleaded guilty
where applicant cooperated with authorities
whether reimbursement by third party is a relevant consideration
how "fresh evidence" is to be taken into account on a sentencing appeal

LEGISLATION CITED:
Crimes Act 1900, s178BA, s300
Crimes (Sentencing Procedure) Act 1999, s21A, s22, s22A, s23, s32
Criminal Appeal Act 1912, s6

DECISION:
Application for leave to appeal granted
Appeal dismissed.

JUDGMENT:

- 1 -

IN THE COURT OF
CRIMINAL APPEAL

60014/02

Giles JA
Levine J
Sperling J

Thursday, 29 August 2002

R v Burke

Judgment

  1. Giles JA:  I agree with Sperling J.

  2. Levine J:  I agree with Sperling J.

  3. Sperling J: On 16 November 2001, Kerry John Burke (the applicant) appeared for sentence in the District Court at Lismore before Ducker DCJ, having pleaded guilty to 39 charges of fraudulent misappropriation under s 178BA of the Crimes Act 1900 (NSW) and 11 charges under s 300(2) of the act.

  4. The charges under s 178BA of the Crimes Act were all in the following form:

    [O]n or about [date] at Tweed Heads in the State of New South Wales, the defendant did, by deception, namely representing to [named person] that the sum of $x would be invested in [mortgage, trust etc.] dishonestly obtain for KJ Burke and Associates Pty Ltd [or KBA Financial Services Pty Ltd] a financial advantage, namely the use of the sum of $x.

  5. The charges under s 300(2) of the Crimes Act were all in the following form:

    [O]n or about [date] at Tweed Heads in the State of New South Wales the defendant did use an instrument, namely [particular letter, form or document] which was and the defendant knew to be false, with the intention of inducing [particular person or entity] to accept the instrument as genuine and, because of that acceptance do some act to another’s prejudice, namely [particular act relating to $x], to the prejudice of [particular person or entity].

  6. The maximum penalty for an offence under s 178BA is five years imprisonment and, under s 300(2), ten years.

  7. The charges were originally laid by investigators of the Australian Securities and Investment Commission (ASIC), hence the involvement of the Commonwealth Director of Public Prosecutions.

  8. Ducker DCJ sentenced the applicant separately on each of the charges to produce an overall term of imprisonment of ten years (commencing from 2 October 2001) and an effective non-parole period of seven years and…

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Details
AGLC
R v Burke [2002] NSWCCA 353
Case
[2002] NSWCCA 353
Decision Date

CaseChat Overview and Summary

The applicant, Burke, appealed against the severity of his sentences for fraud and misappropriation, arguing that they were manifestly excessive. The applicant, who operated as an investment adviser and insurance broker, had misappropriated approximately $5 million from his clients over several years. The court was required to decide whether the sentences imposed were appropriate, considering the factors such as breach of trust, the amount of money involved, and the period over which the offences took place. Additionally, the court had to consider whether the applicant's cooperation with the authorities and the reimbursement of a portion of the stolen funds should have been taken into account when determining the sentence.

The court concluded that the applicant's appeal against the severity of his sentences should be dismissed. The court found that the sentencing judge had appropriately considered the relevant factors in imposing the sentences, including the breach of trust, the amount of money involved, and the period over which the offences occurred. The court also held that the applicant's cooperation with the authorities and the reimbursement of a portion of the stolen funds did not warrant a lesser sentence. The court further found that the applicant's plea of guilty and his cooperation with the investigation were properly considered by the sentencing judge and that no additional discount should have been applied. The court held that the applicant's subjective case was adequately put before the sentencing judge and that there was no basis for a finding of relevant incompetence of counsel. Therefore, the appeal against the severity of the sentences was dismissed.

The court granted the applicant leave to appeal but dismissed the appeal on the grounds that the sentences imposed were not manifestly excessive. The court found that the sentencing judge had appropriately considered the relevant factors in imposing the sentences and that no additional discount should have been applied for the applicant's cooperation with the authorities or the reimbursement of a portion of the stolen funds. The court held that the applicant's plea of guilty and his cooperation with the investigation were properly considered by the sentencing judge and that no error had been shown in the sentencing process.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The applicant now applies for leave to appeal against the sentences imposed on grounds which include that the sentences are manifestly excessive.Facts of offences During the period spanned by the charges, namely February 1994 to June 2000, the applicant operated as an investment adviser and, for part of the time, also as an insurance broker. He operated his business through a company called KJ Burke and Associates Pty Limited which changed its name to KBA Financial Services Pty Limited (“KBA”) on 18 April 2000. KBA operated from premises in Tweed Heads. Over the years, the applicant was a proper authority holder for MLC Limited (1991-93), Financial Wisdom Limited (1993-98) and Security Financial Planning Pty Ltd (1998-2000). In addition to investment advising and insurance broking, the applicant was engaged in a variety of businesses, again operated through company structures. All of the charges arise out of the applicant’s dealings with his investment clients. Clients entrusted the applicant with money to invest, usually in relatively safe investments, such as Bankers Trust, Asgard or first mortgages on property. None of the monies which were the subject of the s 178BA charges were so invested by the applicant, despite his written assurance to the clients. Instead the monies were diverted to the applicant’s own use and deposited into an account operated by him at the Commonwealth Bank (under the name of KBA). Many of the clients whose funds were misappropriated were elderly and/or retired people. Some 26 investors were involved. The total amount of monies diverted by the applicant which are the subject of the s 178BA charges is $4,490,563. The s 300(2) charges relate to unauthorised withdrawals by the applicant of funds which were properly invested. The total amount concerned in these charges is $923,150. These monies were again used by the applicant for his own purposes. The offences came to light following complaints about the applicant in early 2000 which ultimately led to an investigation of his affairs by ASIC. The applicant was interviewed by ASIC investigators in April 2001. The applicant admitted to misappropriating about $5m of clients’ funds and that, substantially, the misappropriated funds were used for the purposes of other businesses with which he was connected. Tendered in the sentence proceedings was a liquidator’s report to creditors of the applicant and his various companies. In that report the liquidator, Mr Phillip Jefferson said (at AB 126):Mr Burke appears to have treated all companies in the group as his “alter ego”. Monies were deposited and transferred between companies and assets were transferred between entities (including Mr Burke and the various companies) without any proper consideration.Sentencing of the applicant The applicant was 41 years of age when sentenced. In his remarks on sentence, Ducker DCJ was critical of the number of charges that had been laid. His Honour said that the matter could have been presented more efficiently using the procedure laid down in s 32 of the Crimes (Sentencing Procedure) Act 1999.

Evidence

Evidence Before The Court

This ground of appeal fails.Ground 10: That the sentencing judge erred in that he took into account “ostentatious living” by the applicant when there was little evidence to support this view. The relevant passage in the remarks on sentence is as follows (p3):Their money was spent on his own business ventures, ostentatious living and, there is a very strong suggestion, unsuccessfully in the main, punting on racehorses. This finding relates to the way the misappropriated money was spent. That was a relevant consideration. There was sufficient evidence to support the finding that the money was spent, in part, on ostentatious living. The leasing of two BMW motor cars and a Land Cruiser and the applicant’s financial interest in race horses was sufficient to justify the finding.Ground 11: The sentencing judge erred in that he failed to consider the applicant’s contrition and remorse as a mitigating factor in relation to sentence. It was for the applicant to satisfy the court that he was contrite, that being a consideration in mitigation. His Honour was not bound to find, on the material before the court, that the applicant was contrite. His Honour found he was not, as I have mentioned. No error has been disclosed in the way his Honour dealt with this issue.Ground 12: The sentencing judge failed to take into account the $457,000 repaid by the applicant. The applicant gave evidence that on 16 June 2000 the proceeds of a lawsuit were paid into a bank account of KBA Financial Services Pty Ltd, one of the applicant’s companies, that the cheque was cleared on 19 June 2000, and that on 11 July 2000 the bank account was frozen. The applicant said he would have been able to withdraw those funds but chose not to. He said he “was prepared to take the risks to help as many people that were dear and close to me as I possibly can”. He went on to say, “As has turned out that has not been able to be fulfilled.” The liquidator was appointed in relation to the KBA company on 10 July 2000. He stated in his report, which was in evidence at the sentencing hearing, that, as at that date, two of the company’s three bank accounts were in overdraft and one held funds in an amount which was in the order of $6000. The sentencing judge was not bound to find, on this evidence, that the $457,000 had been utilised by the applicant in part reimbursement of defrauded clients. Indeed, on the evidence it was not open to be found that the $457,000 had been repaid by the applicant. This ground of appeal accordingly fails.Ground 14: The sentencing judge erred in giving excessive weight to the applicant’s prior conviction. All the sentencing judge said on this topic was that the applicant had previously committed offences of a similar kind and that his record did not entitle him to leniency. This ground of appeal fails.Ground 7: The head sentence was manifestly excessive. In sentencing for misappropriation offences, the most important considerations are breach of trust, the amount of money involved and the period over which the offences took place: see Machtas (1992) 62 A Crim R 179, per Gleeson CJ (at 182). As may be expected, the range of sentences varies greatly depending on the relationship between offender and victim, the amount involved and the period occupied by the course of conduct.

Decision

Reasons for decision

I would not impose a lesser sentence than the one under appeal taking into account the evidence before the sentencing court and the fresh evidence admitted on appeal. That being so, the appeal should not be allowed on the ground of fresh evidence.Conclusion The appeal should be dismissed for these reasons. The orders I propose are that the application for leave to appeal be granted but that the appeal be dismissed.

Ratio Decidendi

Legal Principle Established

The sentencing judge said that a discount of 20 per cent should be allowed for the plea of guilty. He said that he made no allowance for remorse or contrition as he did not believe the applicant had any, and that the allowance related solely to the objective assistance provided to the criminal justice system by the plea of guilty albeit made in the face of overwhelming evidence. His Honour was entitled to find that the applicant had no remorse or contrition, and to see the plea of guilty as material only as to utilitarian value; no error in that respect has been shown. The applicant submitted that the overall sentence did not reflect the utilitarian value. Taking this as complaint that the 20 per cent was inadequate, in my opinion in the circumstances of this case it was a proper allowance.Ground 2: That his Honour erred in that insufficient weight was given to the co-operation shown by the applicant to the investigating authorities. The applicant co-operated in the ASIC investigation, producing documents readily, and submitted to an interview in which he readily admitted the facts on which the charges were later based. The applicant submits that a discount should have been allowed in addition to the discount for the plea of guilty. There is no statutory provision for such a discount as in the case of a plea of guilty. Section 22 of the Crimes (Sentencing Procedure Act) 1999 relates to a plea of guilty. Section 23 relates to assistance to law enforcement authorities, but that is assistance which aids the apprehension and/or conviction of other offenders. A full confession and co-operation with the investigating authorities from the start does not entitle an offender to a discount over and above the discount for a plea of guilty. Such behaviour may be relevant in other ways, such as being evidence of contrition in conjunction with other evidence. As I have said, the sentencing judge declined to find contrition. The applicant’s co-operation and admissions were in the face of overwhelming evidence of his offending, and I do not think that he erred in failing to regard it as evidence of contrition. The applicant invoked s 22A(2) of the Crimes (Sentencing Procedure) Act 1999 which provides that a court may impose a lesser penalty on an offender who has been tried on indictment having regard to the degree to which the defence has made pre-trial disclosures for the purposes of the trial. This provision has no application where there has not been a trial.Ground 3: The applicant’s subjective case was not fully or adequately put before the sentencing judge. There was no evidence that any deficiency in the applicant’s evidence before the sentencing judge was due to any act or omission on the part of counsel representing the applicant at the sentencing hearing. In submissions this was expressly put forward as a ground of incompetence of counsel within the principles considered in R vBirks (1990) 19 NSWLR 677. The applicant relied on affidavits said to show that there was a failure fully or adequately to put the applicant’s subjective case because of counsel’s incompetence. The Crown objected to the affidavits on the ground that they did not show this and were irrelevant. We ruled that they did not show it and declined to receive the affidavits. I do not think that relevant incompetence of counsel should be found apart from the affidavits. There is no basis for this ground.Ground 4: The sentencing judge erred in placing weight on the fact that indemnity insurance was not in place in relation to the applicant’s activities and that the victims of the applicant’s offences lost their investment.