R v Chung

[2023] NSWDC 257

District Court

New South Wales

Medium Neutral Citation:

R v Chung [2023] NSWDC 257

Hearing dates:

21 June 2023
26 June 2023

Date of orders:

17 July 2023

Decision date:

17 July 2023

Jurisdiction:

Criminal

Before:

Sutherland SC DCJ

Decision:

The offender is sentenced to a term of imprisonment of 3 years to be served by way of Intensive Correction Order.

Catchwords:

CRIME — Fraud — Dishonestly obtain financial advantage by deception — offender Chief Financial Officer — offender paid herself overtime when not eligible —salary inflated above approved annual salary

SENTENCING — Relevant factors on sentence — Multiple offences — Accumulation, concurrency and totality

SENTENCING — Relevant factors on sentence — Effect of delay

SENTENCING — Relevant factors on sentence — Use of Comparative Cases

Legislation Cited:

Crimes Act 1900 (NSW)

Crimes (Sentencing Procedure) Act 1999

Cases Cited:

Edelbi v R (wrongly reported as R v Edelbi) [2021] NSWCCA 122

FL v R [2020] NSWCCA 114

Gal v R [2015] NSWCCA 242

Hughes v R [2021] NSWCCA 238

Lane v The Queen [2018] HCA 28; (2018) 265 CLR 196

Lane v The Queen [2018] HCA 28; (2018) 92 ALJR 689

Marks v R [2009] NSWCCA 24

Mill v The Queen (1988) 166 CLR 59

Moodie v R [2020] NSWCCA 160

Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 12

Narouzi v R [2020] NSWCCA 237

Pratten v R [2014] NSWCCA 117

R v Bazouni [2020] NSWDC 61

R v Clarke [2019] NSWDC 2

R v Egge [2020] NSWDC 277

R v Ferguson [2022] NSWDC 356

R v Hawker [2001] NSWCCA 148

R v Jolley [2021] NSWDC 647

R v Mears (1991) 53 A Crim R 141

R v Olbrich [1999] HCA 54; 199 CLR 270

R v Pont [2000] NSWCCA 419; (2000) 121 A Crim R 302

R v Sandford (unreported, NSWCCA, 7 March 1994

R v Stanbouli [2003] NSWCCA 355; (2003) 141 A Crim R 531

R v Swadling [2004] NSWCCA 421

R v Todd [1982] 2 NSWLR 517

R v Todorovic [2008] NSWCCA 49

R v Tomich [2002] NSWCCA 175

R v Woodman [2001] NSWCCA 310

R v XX [2020] NSWDC 771

Regan v R [2019] NSWCCA 6

Scanlan v R [2006] NSWCCA 238

Subramaniam v R [2013] NSWCCA 159

Category:

Sentence

Parties:

Rex (Crown)
Yvonne Chung (Offender)

Representation:

Counsel:
C Triscari (Solicitor Advocate, Crown)
B Levet (Offender)

Solicitors:
Director of Public Prosecutions (Crown)
Kinghan and Associates (Offender)

File Number(s):

2020/365228

SENTENCE

1. Yvonne Yee Chung appears for sentence having been found guilty by a jury with respect to 78 counts of having, by deception, dishonestly obtained a financial advantage from her employer over a period of approximately four and a half years.

2. Each of the individual counts was preferred pursuant to the provisions of s 192E(1)(b) of the Crimes Act 1900 (NSW). The maximum penalty is 10 years imprisonment. There is no standard non-parole period.

BACKGROUND TO COUNTS IN THE INDICTMENT

3. As will become clear, the period during which money was dishonestly obtained by the offender from her employer was approximately four and a half years between August 2011 and October 2015.

4. Notwithstanding that suspicion of overpayments by the offender to herself had arisen in 2015, had crystallised by early 2016 and the matter referred to police shortly thereafter, for reasons which have not been sought to be explained before me, charges were not laid until December 2020.

5. The offender was committed for trial in mid-2021 and the matter was originally fixed for trial in May 2022 with an estimate of six weeks. However, it was not reached at that time and in due course a fresh trial date was fixed for April 2023.

6. The trial commenced in late April 2023 and proceeded with a jury for a period of approximately six weeks. The indictment as presented at trial contained 176 counts. There was one principal count and 175 alternative substantive counts. In the course of the trial there was one count which became the subject of a directed verdict.

7. On 14 June, after deliberating for some five days, the jury returned 97 verdicts of not guilty and 78 verdicts of guilty.

8. The essence of the case brought by the Crown derived from the fact that Ms Chung had been employed as the Financial Controller of a surveying company, Lynton Surveys. She was the person ultimately responsible for the fortnightly payment of wages and salary to the company’s employees. It was the Crown’s overall allegation that repeatedly, during the period from July 2010 to December 2015, Ms Chung intentionally overpaid herself on a regular basis.

9. The underlying and fundamental factual basis for the prosecution of Ms Chung relied upon the testimony of the sole shareholder and effective owner of the company, Mr Peter Hooker. Mr Hooker’s evidence, in short, was that the accused had been employed from her commencement with the company in May 2007 on a salary of $90,000 per annum, plus superannuation. His evidence was that no pay increase had ever been approved by him subsequently, during the entire period of her employment with his company.

10. Following the departure of the offender from her employment with the company in late 2015, a reprinting of the fortnightly payslips during the identified period between July 2010 and December 2015 disclosed, on the face of the payslips, overpayments to Ms Chung in excess of the asserted base salary of $90,000. Such alleged overpayment of base salary relied upon an acceptance of Mr Hooker’s evidence that the original contracted base salary had never been increased.

11. However, in addition to such increased payments of base salary, some payslips included amounts which were paid for overtime allegedly worked by Ms Chung. Those payments were also relied upon by the Crown as a separate factor of dishonest or fraudulent obtaining based upon the further testimony of Mr Hooker that Ms Chung had been employed on a salary, not wages, and accordingly no overtime at all was payable or had ever been approved by him.

12. A further and additional factor on some particular payslips revealed payment to Ms Chung by way of ‘cashing out’ of purported entitlements to holiday pay which had allegedly been accrued. Such payments by way of ‘cashing out’ the entitlement was similarly said to have been unapproved by Mr Hooker and hence dishonestly obtained by the offender.

13. In addition to these three identified specific factors, there were alleged overpayments of superannuation which had been calculated on the inflated base salary.

14. Whilst the Crown could have elected to rely on a general deficiency, the Crown proceeded with one count embracing all of the alleged different factors of overpayments, including superannuation.

15. Accordingly, the first count in the indictment alleged defrauding over the entire period from 4 July 2010 to 1 December 2015. This count, which became described as the “omnibus” count, was presented to the jury by the Crown on the basis that all of the identified individual acts of obtaining by deception during the identified period would need to be proved to their satisfaction beyond reasonable doubt before they would be entitled to bring in a verdict of guilty on that count.

16. The Crown adopted this course, colloquially putting “all the eggs in one basket”, because of a concern that a verdict of guilty to a defrauding over the entire period, in respect of which there were different contributing factors, might otherwise lead to a problem of the type encountered in Pratten v R [2014] NSWCCA 117. The problem in Pratten was that the way in which the matter went to the jury could have led to some members of the jury being satisfied with dishonesty on one factor, and other members of the jury being satisfied of a different factor or factors of dishonesty.

17. Following Pratten, and other similar cases, juries are required to be directed that they must reach unanimity on at least one factor where there are different bases on which a verdict of guilty might be returned (see also: Lane v The Queen [2018] HCA 28; (2018) 265 CLR 196; Regan v R [2019] NSWCCA 6; R v Egge [2020] NSWDC 277).

18. However, the Crown eschewed such an approach and accordingly sought a guilty verdict on Count 1 on the basis of proving every particular alleged. If established, this would have been a fraudulent obtaining of more than $300,000.

19. As a consequence of going to the jury with respect to Count 1 on an “all or nothing” basis, the Crown then pleaded in the alternative, a fraudulent obtaining with respect to the alleged overpayment in each of the individual payslips. The Crown identified the alleged overpayment of remuneration in each of them with specificity as to the contributing factors which were alleged to be dishonest. There were, therefore, 175 alternative substantive counts in the indictment of which 174 were left to the jury.

20. However, a further complication existed with respect to a detailed consideration of the individual payslips. Some of the payslips contained an alleged overpayment with respect to the base salary only. Other payslips included an additional payment for overtime (or by some other descriptor such as ‘holiday pay’ or ‘sick pay’), while other payslips included the factor of ‘cashing out’ of purported entitlements to holiday pay.

In accordance with Pratten, the jury was directed that they needed to be unanimous as to at least one of the factors of dishonest obtaining in respect of those payslips where there was more than one possible contributing factor.

21. A positive defence case was led at trial in which the accused gave evidence, in direct contradiction to the evidence of her employer Mr Hooker, that there had in fact been approved annual increases to her base salary. These identified increases were said to have been actually approved by Mr Hooker himself and evidenced in writing, signed by him, and placed in her personnel file. These were identified by her as first, an approved increase in June 2010 from $90,000 to $95,000. A further increase was said to have been approved after discussions with Mr Hooker in July 2011 from $95,000 to $98,000, and a yet further increase to $99,000 in the second half of 2012.

22. She also gave detailed evidence regarding a further substantial increase, said to have been approved by Mr Hooker, of $150,000.

23. The verdicts of not guilty returned by the jury with respect to specific payslips which were confined to the single factor of an alleged fraudulent payment in excess of the base salary of $90,000, give rise to a clear conclusion that the jury either accepted the evidence of the pay rises which had been outlined by the accused in her evidence, up to $99,000, or at the very least, they entertained a reasonable possibility that such account was true. The jury was certainly not satisfied of all of Mr Hooker’s evidence beyond reasonable doubt.

24. I note in passing that following her removal from the premises of her employer in November 2015, the offender’s personnel file was ascertained to be missing. It was the Crown contention at trial that the personnel file and its contents had been taken by the offender. The positive defence case clearly implied that the file and its contents, including the alleged signed approvals for salary increases, must have been removed and destroyed or hidden by Mr Hooker himself.

25. On the state of the evidence, I am unable to reach any conclusion with respect to this part of the case and I simply ignore it with respect to a consideration of sentence.

26. I should note that the jury’s presumed acceptance of the accused’s evidence regarding approved increases to her salary must only have been in respect of the first three pay rises which she identified, namely from $90,000 to $95,000 from June 2010; to $98,000 from July 2011; and to $99,000 from the second half of 2012.

27. It is clear that the jury rejected the evidence of the accused that her base salary was ever approved beyond $99,000. Individual counts which relied only on overpayments of the base salary in excess of $99,000 resulted in guilty verdicts.

28. As a consequence of the jury not being satisfied beyond reasonable doubt of some elements of the overall fraudulent conduct alleged by the Crown, they returned a verdict of not guilty with respect to the omnibus Count 1.

29. Similarly, 20 counts (2-3, 5-14, 16-17, 21-25 and 28), each of which alleged a dishonest overpayment of $192.31 calculated by reference to a base salary of $90,000 but with actual payment by reference to a base salary of $95,000, resulted in verdicts of not guilty.

30. Count 4 alleged an overpayment on the same basis, i.e. payment at $95,000 rather than $90,000. However, there was an additional payment for 6.5 hours of sick pay which should have been deducted from the fortnightly base salary payment. It had not been. The explanation by the accused was that the additional overpayment of 6.5 hours was simply an unintentional mistake by her in not manually deducting the amount of that payment from her base salary.

31. The jury’s verdict of not guilty is consistent with an acceptance of that explanation or at the least, an acceptance that it might possibly be true.

32. The jury similarly accepted, or at least entertained a reasonable doubt with respect to, a claimed unintentional mistake by the offender with respect to Count 15.

33. However, various other payslips contained an alleged overpayment of remuneration based on more than the single factor of an increase to the base salary.

34. Numerous counts included a payment of overtime in addition to an increased base salary, such payments of overtime, in the Crown case, having not been approved by Mr Hooker. His evidence in relation to overtime was that the accused was in a salaried position, and accordingly, there was no entitlement to overtime at all.

35. Various other counts included payment of holiday pay or sick pay where such payments were not deducted or reduced from the base salary payable in the same pay period. These overpayments were repetitive and recurring. On other occasions there were additional payments recorded in the payslips which occurred within a pay period, but in addition to the normal payslip within that time.

36. The contest at trial with respect to overtime primarily turned on the evidence of Mr Hooker who had sworn that no overtime was ever approved or payable, and the contrary evidence from the accused that at a meeting with Mr Hooker, he had approved payment of overtime, and that there had been a lump sum reconciliation evidenced by one of the payslips in the trial. The jury’s verdict on this count indicates that they accepted that some overtime was payable, contrary to Mr Hooker’s evidence, and that the particular payslip (Count 94) did evidence a lump sum reconciliation.

37. Notwithstanding that verdict by the jury, it is clear that other claims attributed to overtime by Ms Chung were rejected by the jury who were clearly satisfied that she had dishonestly added overtime on some particular occasions.

38. According to the evidence of Ms Chung she accounted for at least some of the overtime hours that she claimed to have in fact worked by attributing the hours of overtime worked as either ‘sick pay’ or ‘holiday pay’ in the MYOB accounting records.

39. In the absence of a question trail, perhaps defamation style, being provided to the jury, the varied verdicts returned by the jury do not lead to a clearly recognisable understanding of the basis of their verdict in respect of every count. While it is clear that the jury have acted on an increase in base salary above $99,000 not ever being approved, there is some difficulty on some counts in ascertaining whether they have rejected a particular payment for sick pay or holiday pay as being dishonest, or in others that they have been satisfied that both were dishonestly obtained.

40. It is clear that on some particular counts the claimed overtime must have been found to be excessive, and on others that the ‘cashing out’ of holiday pay was something done dishonestly and without approval.

41. The Crown has prepared an additional table, effectively applying the principles in R v Olbrich [1999] HCA 54; 199 CLR 270, in order to set out the Crown’s view of the factual basis for the different verdicts.

42. The jury obviously undertook a detailed analysis of particular payments and examined the evidence given by the offender closely. In some instances, the chronological sequence of events would appear likely to have influenced their verdict. By way of example, in April 2012 the offender was paid her regular fortnightly entitlement during the period. However, on the two days before she departed on a 10 day overseas holiday, she paid herself a total of 160 hours of extra holiday pay on top of her entitlement. The coincidence of paying herself almost $8,000 on top of her salary, immediately before leaving on an overseas holiday, clearly led the jury to reject her evidence that she was entitled to ‘cash out’ additional holiday leave allegedly accrued.

43. It can be noted in passing that the chronology provided to the jury also included substantial cash withdrawals from the Star Casino immediately before and immediately after this holiday.

44. As a consequence of the jury’s presumed factual findings, the Crown has recalculated the amounts of the overpayments consistent with the jury having found facts contrary to the evidence of Mr Hooker. Those figures and the total in the Crown table were based on the most favourable view of the findings of the jury in favour of the offender. The individual figures and the total were agreed by the defence. As I will make clear shortly, I have reached a slightly different view beyond reasonable doubt, than the overly favourable view taken by the Crown as to the quantum involved in some of the counts.

45. An analysis of the jury’s verdicts indicates that on some occasions, (Count 4 and Count 15) where the offender paid herself her fortnightly base salary and included additional amounts for holiday pay and/or sick pay without deducting it from the base salary, the jury must have extended the benefit of the doubt as to whether such failure to reduce the base salary was in effect, an innocent mistake. However, where the offender on some occasions on the same day and on others within several days, claimed lump sums for further holiday pay and sick pay, verdicts of guilty have been returned.

46. Endeavouring to ascertain the quantum of the financial advantage obtained by the offender which is consistent with the varied verdicts of the jury, and in particular with those counts to which they returned a verdict of not guilty, is no easy task. However, some aspects of the jury’s reasoning may be readily ascertained.

47. All calculations which have been undertaken by the Crown proceed on the basis that increases in salary up to $99,000 were approved. Clearly, base salary payments at higher hourly rates, and by extension higher annual rates have led the jury to return verdicts of not guilty where such increased annual salary payments are evident.

48. The original Crown table and outline of submissions on sentence contained numerous counts where the calculated figure of the money obtained had been determined by reference to a base salary of $90,000 rather than the increased amount of base salary that the jury’s verdicts would indicate they accepted. The Crown’s recalculation of those amounts reduced the total overpayment to approximately $137,000.

49. However, a further difficulty in ascertaining the actual financial advantage obtained by the offender arises when consideration is given to the fact that a not insignificant proportion of the increased payments which she dishonestly obtained was paid to the Australian Taxation Office (ATO). Given that the charges brought against her pursuant to s 192E(1)(b) focus on the financial advantage actually obtained, and giving some broad consideration to applicable tax rates, leads to a conclusion that the actual amount obtained by way of money transferred into the offender’s bank accounts, and consistent with the verdicts by the jury, is likely to be in the vicinity of approximately $100,000, or perhaps a little less.

21. However, it is to be observed in considering the objective seriousness of her offending that the damage to the victim of the crime, namely her employer, was the gross figure of the payments made by them which would include the amounts that were paid to the ATO.

22. The difference between what she obtained and the damage and loss that she caused, highlights the circumstance that the amount of money obtained by the fraudulent conduct is but one factor to be taken into account in determining the objective seriousness of the offending.

FACTUAL DETERMINATION

52. A judge called upon to pass sentence following a jury trial is required to determine, consistently with the jury’s verdicts, the relevant facts to be taken into account in determining an appropriate sentence.

53. As a matter of first principle, facts which aggravate the severity of the criminality in relation to offending are required to be proved by the Crown beyond reasonable doubt, whilst mitigatory facts relied upon by an offender must be established on the balance of probabilities: see R v Olbrich [1999] HCA 54; 199 CLR 270.

54. There is, however, no general rule that requires a sentencing court to comprehensively set out each and every fact associated with a particular course of offending. In some cases, this could be quite impractical, particularly when dealing with a multiplicity of charges.

55. However, a sentencing court is required “to identify fully the facts, matters and circumstances which the judge concludes bear upon the judgment that is reached about the appropriate sentence to be imposed.”: Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 12 at [29].

56. Similarly in Gal v R [2015] NSWCCA 242, Beech-Jones J, (Bathurst CJ, and Price J agreeing) having considered a submission that the sentencing judge had failed to address the objective seriousness of the offences, said at [39]:

“Nothing in this judgment is meant to suggest that a sentencing judgment must dwell upon either the facts of an offence or their objective seriousness at any length. Instead, at a minimum such reasons should state or refer to the essential facts upon which an offender is sentenced and provide at least some assessment of, or reflection upon, the seriousness of the offending conduct.”

57. It is not proposed in these Remarks to summarise the factual variations between each of the individual counts. It is sufficient to observe that the factor of dishonesty in the individual payslips which formed the basis for the individual substantive counts, varied according to precisely what it was that was said to be claimed over and above a proper entitlement.

58. Viewed by reference to the type of overpayment the offending fell into a variety of different categories. These included counts where the only dishonest component was an overpayment of base salary. In other instances, sick pay and/or holiday pay was claimed in addition to base salary. In respect of other payslips, a lump sum ‘cashing out’ of allegedly accrued holiday pay hours was dishonestly paid, and in some instances a variety of different factors were included in the particular payslip.

59. Consistent with the verdicts of the jury, I find that the first act of dishonesty by the offender was the claiming of additional sick leave which was not deducted from her base salary, and the cashing out of holiday pay which was not approved, in August 2011.

60. In the immediate lead up to that act of dishonesty the evidence revealed that she had made cash withdrawals at the Star City Casino, or within that complex, of almost $19,000 in the three months leading up to that defalcation. She had similarly withdrawn cash from the ATMs at that location in an amount of $3,400 in the week immediately before her decision to overpay herself.

61. I am satisfied that similar substantial cash withdrawals occurred in February and March 2012 before more substantial offences of dishonesty in April 2012 immediately before and after the trip overseas to which I have already referred. I am satisfied beyond reasonable doubt that she thereafter sought, in effect, to top up her salary by dishonestly claiming and cashing in additional hours written up as holiday pay and on other occasions by claiming sick pay on top of her base salary.

62. On a number of occasions, she clearly dishonestly paid herself sums of money which she variously attributed to either accrued holiday pay, or not insubstantial variations to her base salary, which the jury clearly were satisfied beyond reasonable doubt were fraudulent and not approved. I similarly am satisfied beyond reasonable doubt of that circumstance.

ASSESSMENT OF OBJECTIVE SERIOUSNESS

63. The Court is required to assess the objective seriousness of each of the offences. The yardstick which the Court must bear in mind is the maximum penalty of 10 years imprisonment.

64. Features commonly identified as bearing on an assessment of the gravity of a fraud offence include firstly the amount of money involved and whether the loss is irretrievable.

65. In the present matter as I will set out in more detail, the amount of money involved relates to an actual obtaining, that is, deposits into her own bank account by the offender in an amount of approximately $100,000. The loss to her employer however, was the gross amount paid to her of just under $150,000; the difference being the amount paid to the ATO.

66. The second relevant factor is the length of time over which the offences were committed. Based on the findings by the jury, the offending conduct extended over a period of approximately four and a half years and occurred sporadically during that time.

67. The next relevant factor is motive.

68. In the course of the trial the Crown tendered bank statements which clearly indicated frequent withdrawals of cash from the Star Casino. An examination of the detail and timing of these withdrawals from the actual bank statements, viewed along with expenditure for other ordinary living expenses, was strongly suggestive of a problem with gambling at the casino by the offender. I do not accept her evidence that some of these withdrawals related to obtaining cash for living expenses.

69. The volume and frequency of withdrawals leading up to the first offending in 2011 to which I have already referred, and the volume and frequency of withdrawals leading up to the next offence in 2012 in respect of which the jury returned a verdict of guilty (Count 45), provides an explanation and likely motive for the course of conduct thereafter.

70. I have already detailed the cash withdrawals from the casino leading up to the first offence in August 2011. After that offence, between the beginning of November 2011 and the time of the commission of the second offence in Count 45 on 27 February 2012, the offender withdrew $21,700 in cash from ATMs at the casino. This includes $7,200 in cash withdrawals in February alone, prior to the defalcation in late February.

71. It is clear that the offending with respect to which the jury was satisfied of the guilt of the offender was motivated by greed and feeding a gambling addiction at that time. The fact of a pursuit of gambling is a relevant factor to be considered with respect to motive, but it does not act as a factor in mitigation: see R v Mears (1991) 53 A Crim R 141 at 145 per Lee CJ at CL (Gleeson CJ and Loveday J agreeing).

72. It is also well established that a breach of the trust reposed in an offender is a relevant factor of aggravation affecting an assessment of the objective seriousness of a particular crime: see R v Stanbouli [2003] NSWCCA 355; (2003) 141 A Crim R 531 at [34] per R S Hulme J.

73. In the present matter, Ms Chung was employed as the Financial Controller with responsibility for the payment of wages to all employees as well as other accounting payments required for the company. She was essentially unsupervised, and the accounts were, for all practical purposes, unaudited. There was clearly a breach of trust in this matter.

74. The degree of planning in relation to the commission of a fraud is also a factor which is viewed as more serious than an offence committed on impulse. Planning and repetition are clear factors of aggravation: see R v Pont[2000] NSWCCA 419; (2000) 121 A Crim R 302 at [43] – [44] per Greg James J. In the present matter the offender clearly manipulated the MYOB accounts program to manually insert some amounts which she claimed dishonestly and also to manipulate the base salary.

75. Each of the above factors contribute to an assessment of the objective seriousness of the offending. However, in the context of offences under s 192E, it is an irresistible fact that the quantum of a particular defalcation may play a more influential role in determining objective seriousness when considered against similar offending.

76. While an assessment of objective seriousness is required for each individual offence in order to come to a view about an appropriate indicative sentence, it is to be noted that in Subramaniam v R [2013] NSWCCA 159 that task was undertaken in the resentencing exercise in the Court of Criminal Appeal by grouping the 30 offences in that matter into categories by reference to the quantum of the fraud in the individual transactions. Following the approach adopted by Latham J in Subramaniam I propose to deal with the different groups of offences in this matter by reference to the amount dishonestly obtained in the individual payslips.

77. I have grouped the offending by Ms Chung in the individual payslips according to the amount of the overpayment where I am satisfied beyond reasonable doubt of the contributing factors of dishonesty. The categories which I have had regard to, in ascending order of objective seriousness are:

• Category 1: Overpayments less than $1000;

• Category 2: Overpayments between $1000 and $2000;

• Category 3: Overpayments between $2000 and $3000;

• Category 4: Overpayments above $3000.

78. I should clearly indicate that with respect to a number of counts in which holiday pay and sick pay was claimed above the base salary where the base salary had been correctly paid at $99,000, I am satisfied beyond reasonable doubt that both the holiday and sick pay, not having been deducted from the base salary were dishonestly paid and are to be included in the amount defrauded.

79. I am similarly satisfied beyond reasonable doubt that where sick pay or holiday pay has been claimed over and above an inflated base salary that they were similarly dishonestly obtained.

80. The effect of the inclusion of these amounts, in addition to those amounts included in the Crown’s amended table, have the effect of increasing the gross defalcation from approximately $137,000 up to approximately $149,000.

81. A table including each of the counts in respect of which guilty verdicts were returned, the gross amount of the overpayment in each payslip, the composition of the overpayment and the category into which I have placed each count is an annexure to this judgment.

82. Of course, as noted earlier in these Remarks, that is the amount of the loss caused to the company. The amount actually obtained by the offender, allowing for an approximation of tax rates, was likely to have been approximately $100,000 or slightly less.

83. Against this overview, counts which fall within Category 1 (less than $1000) are counts 83,133 – 137, 139 – 140, 144, 148, 150, 157 – 158, 162 – 163.

84. This group of offences fall towards the low-end of objective seriousness.

85. Counts which fall within Category 2 ($1000 - $2000) are counts 45 - 46, 67, 77, 79, 81, 86 – 89, 95 – 98, 100, 109 – 110, 112 – 114, 116, 118 – 120, 122 – 129, 142 – 143, 146, 151 – 152, 154 – 155, 159, and 164.

86. These offences fall well under a mid-range of objective seriousness.

87. Counts which fall within Category 3 ($2000 - $3000) are counts 31, 51, 105, 108, 111, 115, 117, 145, 156, and 172.

88. These offences still fall under an identifiable mid-range.

89. Counts which fall within Category 4 (overpayments above $3000) are counts 49, 50, 121, 131, 138, 141, 147, 149, 153, 160, 168, and 170.

90. These offences fall at the bottom of a broad mid-range, or perchance still below it, when one considers the quantum of defalcations in a multitude of other cases.

SUBJECTIVE FACTORS

91. The offender gave evidence in the course of the trial. However, other than the circumstance that she was a person of prior good character, little, if any evidence was adduced about her background.

92. She did not give evidence on sentence after the guilty verdicts, nor was any psychological or other assessment provided to the court.

93. There were, however, a number of glowing references which were tendered during the sentence proceedings. These included a reference from her partner, Harvey Hon, who describes himself as a retiree. Mr Hon attended Court throughout the trial and is clearly aware of the details of the case which was brought against his partner.

94. He describes having first met Ms Chung at University some 39 years ago. He has been her partner for 30 years. He said that he has always found her to be an honest, trustworthy, kind, good-natured, compassionate and caring person. He described her in her professional life as being well respected as a diligent, supportive, helpful professional with a strong work ethic. He described her voluntary work in assisting charities. He also said that the jury’s verdicts had not altered his stance in supporting her, nor the status of their relationship.

95. A further eight references from a variety of people of apparent good reputation and standing, all of whom were aware of the findings of guilt, attested to her honesty and integrity.

96. These referees included her treating general practitioner who had known her for over 30 years. Dr Erin Crumlin had always found her to be a person of integrity who is fastidious, honest and completely trustworthy. She opined that the charges against Ms Chung seemed totally foreign to the person she had known for decades.

97. The Managing Director of the company who employed the offender as the Group Financial Controller of a group of companies following her departure from Lynton Surveys, described her as a highly reliable, ethical, diligent and trustworthy member of their Senior Management Team between 2015 and 2019. Mr Scott Warren said that she performed her duties at mySmart Pty Ltd with integrity.

98. Ms Lorraine Drennan had worked together with the offender at Time-Life and Reader’s Digest following the merger of those companies from 2005. She described her as being well-respected in the workplace. She had maintained a friendship for over 18 years and finds the conviction of the person she knows and respects as being out of character.

99. A second former employee from the time of the offender’s employment at Time-Life was Jenny Chen. She was an accountant and reported directly to Ms Chung who was the Financial Controller. She had always observed her to be a person of the highest integrity and honesty. She had maintained a friendship for the following 17 years and found the offences completely out of character.

100. Another reference came from Diana Vizard who had been the Marketing Manager during the time that Ms Chung was the Financial Controller at mySmart Pty Ltd. She had remained friendly with the offender since that time and endorsed her as an individual of exceptional character. She said that she had consistently demonstrated qualities of kindness, compassion, and honesty.

101. The Director of the company for whom the offender has worked since 2020, Hyve Designs, also provided a reference. Mr Paul Hovagimian said that she had consistently displayed traits that made her a “reliable and, most of all, an honest individual/employee”. Ms Chung had been under his direct supervision for two years and she had consistently demonstrated integrity and honesty in her actions. Notwithstanding her current convictions in the present matter, he said he would employ her regardless of those convictions.

102. Mr Levet, counsel for the offender, advised the court in the course of submissions that the offender had recently resigned from her position at that company in anticipation of these sentencing proceedings.

103. The next reference tendered was from Neil Cantrill who is now the Data Centre Manager for Amazon Web Services. Mr Cantrill states that he has known the offender for 25 years since they first worked together in 1997 at a firm called Pinnacle Micro where he was a junior logistician, and the offender was the Financial Manager.

104. He described her being a friend and mentor to him, and a positive influence in his life, both personally and professionally. He regards her as part of his family in being an aunt to his three children and effectively a sister to his wife. He said he wished to express his support for her during this challenging time, and that even with knowledge of her convictions, she still has his full support.

105. A reference was also supplied by Mr Andrew Beenie, a company director who has also known the offender for approximately 25 years. Mr Beenie describes the offender as the “partner of a good school friend and ex-teammate”. I would presume that this is a reference to Mr Harvey Hon. Mr Beenie describes her as an intelligent, caring and supportive person who has worked extremely hard. He describes her as being trustworthy and a very genuine and loyal human being. Mr Beenie said that she continues to have his support and friendship despite her convictions in the present matter.

106. A Sentencing Assessment Report dated 10 July 2023 was provided to the Court. Ms Chung reported to the author of that report that she was currently employed as a Senior Accountant on a part-time basis. It indicated that Ms Chung continued to deny any wrongdoing, and claimed that there were verbal agreements with management and that she was naïve and trusting.

107. I have noted elsewhere that this appears to be somewhat inconsistent with her evidence at trial regarding signed approvals for the increase in her salary.

108. As a consequence of her maintaining her innocence she displayed no insight into the impact of the offending.

109. She was assessed as a T1/Low Risk of Reoffending according to the Level of Service Inventory – Revised (LSI-R). She has been assessed as both willing and available to partake in community service work. Community Corrections have assessed her as suitable and are able to provide the equivalent of up to 21 hours work per month.

MITIGATING FACTORS

Remorse and contrition.

110. There is no expression of remorse by the offender. She denies all of the offending in the course of her evidence and maintains those protestations of innocence in her interviews with Community Corrections. The Sentencing Assessment Report includes a claim by Ms Chung that “she did nothing wrong in relation to the current offences”. I do note that she claimed to the Community Corrections Officer that there were verbal agreements with management and that she was naïve and trusting.

111. I note that this assertion stands in stark contradistinction to her evidence at trial which was that there were signed agreements for the various increases in her salary and the clear inference to be drawn from her evidence that it was her employer that had removed her personnel file and hence destroyed the evidence of such written agreements.

112. I note of course that whilst remorse is a mitigating factor to be taken into account where present, a lack of remorse does not operate as an aggravating feature.

Rehabilitation, likelihood of reoffending and personal deterrence

113. Following her departure from Lynton Surveys in December 2015, the offender has been employed in a number of positions of financial trust and responsibility. Those subsequent employers have been fulsome in their praise of her integrity and character, notwithstanding their now knowledge of these convictions. The glowing terms of the references are indicative, in my view, of a non-acceptance of the findings of the jury notwithstanding an acknowledgement of the fact of the verdicts.

113. The deponents were not required for cross-examination and I am unaware as to their state of knowledge regarding these allegations before the end of the trial.

114. However, the references do speak powerfully of the offender’s responsible performance of her commitments without any breach of the trust reposed in her and are relevantly to be taken into account with regard to demonstrated rehabilitation from the conduct which brings her before this Court.

Delay

116. It is trite to observe that justice delayed is justice denied. One is not concerned in the present matter with delayed complaint which in some instances might extend to decades.

117. The reasons for delay in a prosecution can be a relevant factor in assessing whether the delay in question amounts to a matter to be taken into account in mitigation. Sir Laurence Street in R v Todd [1982] 2 NSWLR 517 took into account a delay in imposing sentence in NSW which had been brought about as a consequence of the offender having been arrested in Queensland and having been tried and having served a sentence in that State before returning to New South Wales to be sentenced for earlier offences.

118. The Chief Justice considered that the sentencing judge had fallen into error in placing aside the sentences served by the appellant in Queensland as having little or no relevance. The Chief Justice expressed the view that the inevitable deferment of the processes of the New South Wales criminal law being put into effect led to a situation where it would be wrong to disregard the practical situation that Todd had already served a substantial period of imprisonment in Queensland for offences which were closely related in time and character to those he had committed in Sydney.

119. It was both relevant and material to pay regard to the totality of the imprisonment being visited upon him in both States. Moffitt P and Nagle CJ at CL agreed with the Chief Justice.

120. The High Court in Mill v The Queen (1988) 166 CLR 59, at 65 – 66, expressly agreed with the decision in Todd. The High Court said that Todd was correct and that it reflected “a just and principled approach to the problem of sentencing when an offender comes to be sentenced many years after the commission of an offence”. The effect of delay was held to be required to be reflected in the fixing of an appropriate head sentence as well as a non-parole period.

121. To similar effect were observations by Hunt CJ at CL in R v Sandford (unreported, NSWCCA, 7 March 1994) where a delay between an offence being committed in January 1987 and the subsequent trial in May 1991 was held to be a relevant factor in the determination of an appropriate sentence.

122. In the present matter Ms Chung was effectively terminated from her employment in November 2015, notwithstanding her previous submission of a resignation letter. Statements and other material from the employer were forwarded to NSW Police in early 2016.

123. As noted earlier, the offender was not charged with any of the offences relating to her alleged misconduct with her employer until December 2020. This delay of almost five years between complaint and the laying of criminal charges has not been explained in any way in the current proceedings. There has been a further delay of almost two years since the offender was committed for trial.

124. It is, accordingly, approximately seven and a half years since the spectre of her overpaying herself was first raised and was the subject of correspondence between her former employer and herself in early 2016.

125. This delay is a factor of no small moment in determining the appropriate ultimate disposition of this matter.

COMPARATIVE CASES

126. Observations abound at an appellate level regarding the diminished utility of comparative cases, particularly in matters involving fraudulent conduct. Observations to this effect by Wood CJ at CL in R v Woodman [2001] NSWCCA 310 and in R v Hawker [2001] NSWCCA 148 are set out in the Bench Book and have been referred to in numerous decisions in the Court of Criminal Appeal.

127. However, reference to comparable cases can often be of assistance to a judge at first instance particularly in providing some guidance and an indication as to whether a sentence which might be in contemplation, falls within or outside a sound exercise of judicial discretion.

128. I am comforted in holding that strong view by the observations of Bell P in Moodie v R [2020] NSWCCA 160 at [80] – [95].

129. The President of the Court of Appeal, as the Chief Justice then was, made reference to the long line of authority with respect to the utilisation of statistics and comparable cases. His Honour made specific reference to the judgment of Wilson J, with whom R A Hulme and Hamill JJ agreed in FL v R [2020] NSWCCA 114 in which her Honour had described the applicant’s approach in seeking to establish manifest excess by reference to statistics and a selection of similar cases having been “regularly, and repeatedly, decried by this Court as inapposite to the task.” (at [77]) the then President Bell expressed the strong view that the phrase quoted, namely that the use of “similar cases” had been “regularly and repeatedly, decried by this Court as inapposite to the task” was too strong a statement.

130. His Honour said:

“The position is, again with respect, rather more nuanced than is suggested by the words “decried” and “inapposite”. Far from being inappropriate, the proper and careful use of comparative sentences plays an important role in promoting consistency of sentencing, and consistency of sentencing is an important element of both criminal justice and the rule of law more generally.”

131. It is appropriate to also note that Bell P also said at [88]:

“Of course it remains correct, as Wilson J pointed out in Sabbah v R (Cth) [2020] NSWCCA 89 at [134] that a “glib” recitation of sentences imposed for similar offences without more will be of little or no utility to either a sentencing judge or an appellate court. Relatedly, the use of statistics alone is generally unlikely to supply the granularity necessary for critical appraisal of the closeness of cases presented as “like” or “similar” or “comparable”.”

132. I note that the reasons given by Bell P were agreed with by Davies and N Adams JJ in Moodie and that Payne JA, Walton J and Fullerton J in Narouzi v R [2020] NSWCCA 237, also agreed with Justice Bell’s review of the principled approach to a consideration of comparative cases. Justice Fullerton noted in that matter that she had been assisted by the Crown’s analysis of the cases upon which the applicant relied.

133. Whilst recognising that individual cases and sentences turn on their own facts, both subjective and objective, I have endeavoured to examine a number of, broadly speaking, comparable cases.

134. The only case of some comparable nature brought to the Court’s attention by either party was Hughes v R [2021] NSWCCA 238. That was an unsuccessful application for leave to appeal by the offender. She had been sentenced by Judge McLennan SC in the Lismore District Court to a term of imprisonment of 2 years and 6 months with a non-parole period of 18 months. She had pleaded guilty to one ‘rolled up’ count of obtaining a financial advantage by deception contrary to s 192E(1)(b) of the Crimes Act 1900.

135. The offender had been employed as the Practice Manager at a medical centre and had been responsible for all financial payments and transactions conducted by the business. Over a period of almost seven years, she had transferred approximately $180,000 from the medical centre’s trust account into her own personal accounts. This involved 329 separate occasions of dishonest transactions.

136. The challenge which was brought in the Court of Criminal Appeal where the primary application was for leave to appeal against conviction, sought, in effect, to reverse her plea of guilty. To the extent that the challenge was based on a construction of the agreed facts it is of no assistance in determining an appropriate sentence in the present proceedings. There was no appeal against the sentence which had been imposed.

137. To the extent that the case provides an example of one sentence by another judge in the District Court who imposed full time imprisonment following a plea of guilty and total defalcation of approximately $180,000 by a person in a position of trust, I take note of it.

138. I do note that the sentence exceeded two years and that, therefore, no consideration was required to be given to serving the sentence other than by full-time custody.

139. I have perused a number of past cases involving an earlier iteration of the type of offence with which the Court is presently concerned, namely cases involving larceny as a clerk. Some of these cases involved error by the original sentencing judge in imposing global (or group) sentences, rather than individual sentences for separate counts before him or her. The Court of Criminal Appeal was in those cases obliged to resentence. These include R v Tomich [2002] NSWCCA 175 and R v Swadling [2004] NSWCCA 421 where the same incorrect global approach to sentencing for multiple offences had been taken at first instance.

140. Tomich had been a clerk in the St George Bank and had stolen $15,000 on one occasion. In addition to that count of larceny as a clerk under the then s 156 of the Crimes Act 1900 there were a variety of additional counts ranging in amount from $500 to $3,000. It is not clear what the total amount taken was. There were additional charges relating to altering data stored in a computer which would appear to have been done in order to conceal the defalcations. The ultimate sentence passed in the Court of Criminal Appeal was an effective head sentence of four years with a non-parole period of two years.

141. In Swadling, the appellant had been an accounts clerk in a family company which was involved in timber wholesaling and trading in timber products. She was involved in the preparation of accounts payable documents and the drawing of cheques and electronic transfers of amounts payable. Over a period of 21 months she used her knowledge of the system to divert substantial sums of her employer’s funds to her own accounts. The total amount defrauded was approximately $322,000. She pleaded guilty and received a 25% discount. Judge Dodd had adopted a global approach to nine counts of larceny as a clerk with a further 11 such offences on a Form 1.

142. She had been sentenced at first instance to seven years with a four-year non-parole period. There was evidence of hardship caused to the family company victim.

143. Smart AJ with whom Hodgson JA agreed, took into account that the method of operation was unsophisticated, and that the offender did little to cover her tracks. His Honour expressed the view that she was a relatively junior employee and that the amount taken, while significant, was not large. His Honour did not think that the offence fell towards the upper end of the scale with respect to the particular count in which the starting point had been in excess of nine years against a maximum penalty of 10 years.

144. Having substantially reduced the penalty for that individual count his Honour undertook an individual sentencing approach to the separate counts and imposed a head sentence of 6 years 3 months, and a non-parole period of 3 years and 3 months. I should note in passing that R S Hulme J agreed as to the error which had occurred at first instance but did not agree that the overall effective sentence should have been reduced.

145. Hulme J disagreed with respect to an effect on the length of the sentence related to the offender’s methods being simple or unsophisticated and, contrary to Smart AJ, did not regard that as an ameliorating factor.

146. Other employees charged with defrauding their employers faced charges brought pursuant to the then s 178BA(1) of the Crimes Act of dishonestly obtaining money by deception. The prescribed maximum penalty was of five years.

147. Scanlan v R [2006] NSWCCA 238 concerned a trusted employee who operated the MYOB accounting program in a company with a small number of employees. While there were other employees with accounting qualifications, entries into MYOB including accounts and payroll were the responsibility of the offender. Over a period of approximately two years the offender transferred in excess of $384,000 from the firm’s business accounts to herself. She disguised such transfers as payments to suppliers. At her trial the offender gave evidence that the remaining proprietor of the business had effectively told her to make the payments and to deliberately disguise them in the fashion that they had been, effectively so as to disguise the remuneration being paid.

148. The offender was found guilty by a jury in respect of four counts in a total amount of approximately $384,000. The individual sentences were 2 years with 1-year non-parole for obtaining by deception about $56,000; 2 years 6 months with 1 year 6 months non-parole with respect to the obtaining of $175,000; 3 years with a 2-year non-parole period with respect to about $153,000 and a fixed term of 2 years with respect to an obtaining of $12,300. The effective aggregate sentence with partial concurrence of some of the sentences was 4 years with a 3-year non-parole period. An appeal against conviction and also against sentence was dismissed.

149. A number of sentences in relation to similar offending subsequently proceeded pursuant to charges brought under s 192E(1)(b) of the Crimes Act. In R v Clarke [2019] NSWDC 2 a solicitor pleaded guilty to six charges under that section involving transfers to his private account from the business bank accounts of one of his employer’s clients.

150. The client was the proprietor of the WIN television network with whom the solicitor had become friendly in the course of an ongoing professional relationship. The ultimate defrauding was of $9,753,070. The amounts involved in the individual charged offences ranged from $18,000 up to $4.455 million.

151. The indicative sentences ranged from 8 months with respect to the $18,000 offence to 18 months with respect to $260,000, and 3 years with respect to two offences, each of which involved approximately $2.5 million. The offence of more than $4.4 million attracted an indicative sentence of 3 years and 7 months. The aggregate sentence imposed by Williams SC DCJ was 6 years with a non-parole period of 3 years.

152. R v Todorovic [2008] NSWCCA 49 concerned an accounts manager of a small excavations company with two directors and six staff. The ability to use online facilities to transfer funds for trade creditors and staff salaries was abused by the offender who made 64 unauthorised transfers into her own bank account over a two-year period.

153. There were eight counts on an indictment to which the offender pleaded guilty. A further 56 counts were placed on a Form 1. The total of the dishonest transfers was approximately $171,000. Following the pleas of guilty, Judge Armitage at Penrith District Court imposed a series of fixed terms which were partially accumulated. The effective head sentence was 2 years with a non-parole period of 1 year. The sentences were ordered to be served by way of periodic detention.

154. There was a powerful psychological case presented of a significant disorder which was causally connected to a gambling addiction which led to the offending. Grove J reached a conclusion that on an assessment of the objective seriousness of the offending the sentences imposed did not sufficiently reflect the overall criminality. His Honour expressed reservation as to whether the subjective matters, including the psychological considerations, would be sufficient to justify less than a full-time custodial sentence.

155. However, in the circumstances of a Crown appeal, the Court looked at additional material from a medical practitioner which had been updated since the sentence was imposed at first instance. Accordingly, his Honour concluded that the residual discretion of the Court to dismiss a Crown appeal against inadequacy should be invoked. Simpson J agreed with Grove J, and R S Hulme J, after his Honour’s own analysis and criticism of the decision at first instance, in due course also agreed that the appeal should be dismissed.

156. In Marks v R [2009] NSWCCA 24 the offender had been employed by the NSW Department of Health. He had fraudulently lodged documentation with his employer that purported to support payments for staff training provided by companies with which he was associated, when no such training had been provided at all. The documentation was entirely false, and the transactions were shams. He was able to effect the fraudulent payments because of the position of trust in which he was employed. The successful payments to the bank accounts with which he was connected exceeded $183,000. An additional count of an attempt with similar documentation to obtain a further amount of approximately $119,000 was unsuccessful.

157. At first instance the four charges of dishonestly obtaining a financial advantage in varying amounts between $26,000 and $59,000, and the fifth count of attempting to obtain $118,800, were all given sentences of 2 years and 3 months, with slight variations in the respective non-parole periods. Partial accumulation resulted in an aggregate sentence of 5 years with a non-parole period of 3 years and 9 months.

158. On appeal the individual sentences were varied according to the assessed criminality of each of them and an ultimate aggregate head sentence of 3 years and 5 months with an aggregate non-parole period of 2 years and 9 months was substituted by the Court of Criminal Appeal.

159. In R v Bazouni [2020] NSWDC 61 the offender was a lending manager with the St George bank. Bazouni had been found guilty by a jury of five counts of obtaining a financial advantage by deception in relation to the provision of fraudulent documents in loan applications for the benefit of himself and a number of co-offenders, and an additional count of an attempt. It would appear that the co-offenders, or some of them, had been sentenced by another judge and that at least one of them had given evidence against the offender at trial.

160. The amounts advanced pursuant to the deception practiced on the bank were five investment loans at a value of $920,000 each, amounting to a total of $4.6 million. The count involving an attempt also involved $920,000. The court found that the actual loss ultimately incurred by the bank was approximately $1.5 million. The scheme to defraud the bank took place over a period of about seven months and involved a substantial breach of trust. The indicative sentences for the successful obtaining charges ranged from 12 months increasing to 1 year and 6 months for the subsequent obtainings in the same sum of $920,000. The aggregate sentence imposed by Weinstein SC DCJ (as his Honour then was) was 5 years with a 3-year non-parole period.

161. R v XX [2020] NSWDC 771 involved a solicitor who misappropriated clients’ monies from a trust account. The sums misappropriated, predominantly during 2018, ranged from $55,000 up to $1.2 million. The total defalcation was of an amount in excess of $4.4 million. While some money had been repaid the ultimate loss was still in excess of $3.2 million.

162. In that matter the offender was sentenced by Judge Abadee SC to an aggregate sentence of 8 years with a non-parole period of 4 years and 9 months. This sentence was after pleas of guilty and a discount of 25%.

163. Notwithstanding the offender’s profession, the offender received the benefit and protection of his name being anonymised as a consequence of a suppression order which was made shortly before he was sentenced. It is not apparent that the suppression order had any connection with the proceedings for which he was sentenced given the absence of any additional discount than that applicable to his guilty pleas.

164. R v Jolley [2021] NSWDC 647 was a sentence imposed with respect to the offence of causing a financial disadvantage by deception. A further 10 counts of conveying false information which was likely to make the recipient fear for the safety of a person, which carried five-year maximum penalties, were also the subject of this particular sentence. The somewhat unusual factual background was that the offender was employed as the Dean of the Science faculty at the University of Technology in Sydney (UTS).

132. A course referred to as the Traditional Chinese Medicine course had been found to be one of the least financially viable courses in the faculty. The offender falsely created, or caused to be created, letters allegedly received by her of a threatening nature with regard to the proposed closure of the course. These various items of correspondence were produced to the Vice Chancellor and other employees of UTS and were the basis for the charges of conveying false information.

133. The single count of causing a financial disadvantage related to the cost of security measures which were put in place for the protection of the Dean on an acceptance of the truth of the threats which she claimed to have received. The costs incurred were itemised in an amount of $127,000 which the sentencing judge dealt with on the basis that the costs incurred were at least $100,000.

134. The indicative sentence with respect to the single count under s 192E was 15 months. The indicatives for the production of the threatening letters varied between 3 and 8 months, and an aggregate sentence was fixed at 2 years and 6 months. Judge Bourke SC determined that the sentence should be served in the community by way of an Intensive Correction Order.

135. A further case in which consideration was given to an Intensive Correction order is Edelbi v R (wrongly reported as R v Edelbi) [2021] NSWCCA 122. The background to the commission of the fraudulent offences disclosed a criminal group operating to make fraudulent claims pursuant to the compulsory third party insurance scheme in New South Wales. A company called Physio Rehab Centre Pty Ltd had been set up in December 2014 with a registered Physiotherapist as one of the founding directors. The offender Edelbi was employed as the account manager within the physiotherapy practice.

136. In very brief overview, a number of fraudulent practices were undertaken within the Physio Rehab Centre including false appointments, false treatment notes and fictitious invoices. False invoices were issued and forwarded to Third Party Insurers pursuant to the CTP scheme over a period of two years. An amount of approximately $48,000 was fraudulently claimed with respect to the charges brought against Edelbi.

137. Of that sum, $33,000 was actually obtained. The fraudulent scheme involved the two directors and shareholders who had incorporated the company, as well as the relevant offender, Edelbi, who had commenced as the account manager. The original director resigned in 2015 and was ultimately convicted of a number of offences where he had used a previous position of employment within a Compulsory Third Party insurance company to cause fraudulent payments with approximately $300,000 to be paid to various fictitious physiotherapy providers.

138. After being dismissed from that employment, this particular offender, Mr Muhammad Sallam, was involved in setting up Physio Rehab Centre with a view to pursuing fraudulent claims, from, in effect, the opposite position from his previous employment. In March 2016 Sallam was convicted of seven offences relating to his causing fraudulent payments whilst employed with the CTP insurer and received concurrent terms of imprisonment for 2 years to be served by way of an Intensive Correction Order, together with a 3-year good behaviour bond pursuant to s 9 of the Crimes (Sentencing Procedure) Act.

139. It is not known whether the fraudulent second director, who was a qualified physiotherapist, was charged with any offending. However, it would appear that Edelbi, in addition to pleading guilty and providing assistance to the authorities regarding the fraudulent scheme, had also offered to give evidence in other proceedings. As a consequence, he received a discount of 45% on an otherwise appropriate sentence.

140. With respect to 10 substantive counts and further matters on a Form 1, the judge at first instance, Hock DCJ, imposed a sentence of 3 years with a 2-year non-parole period.

141. It is not necessary to go into the detail of the majority decision in the Court of Criminal Appeal. It suffices to observe that Hidden AJ, with whom Hoeben CJ at CL agreed (Bellew J dissenting) found error in the sentencing judge having failed adequately to consider the option of an ICO. In carrying out the resentencing exercise the Court of Criminal Appeal directed that an appropriate sentence be served by way of an Intensive Correction Order.

142. It is to be observed that at the time of the appeal, the offender had already served 13 months imprisonment and accordingly a period of 13 months was reduced from the sentence of 3 years. The Intensive Correction Order imposed by the Court of Criminal Appeal was accordingly for 1 year 11 months.

143. Whether an aggregate head sentence of three years would have resulted in the imposition of an ICO if the offender had remained on bail, or whether the circumstance that 13 months of actual incarceration had already occurred provided the tipping point, is itself a moot point, the answer to which is not revealed in the judgment in the Court of Criminal Appeal.

144. A further matter touching upon the imposition of an ICO with respect to a fraud offence is to be found in R v Ferguson [2022] NSWDC 356. In that matter the female offender had herself been the victim of what was described as a ‘catfishing or dating scam’. She had separated from her husband at the age of about 58 after many years of a loveless marriage to an alcoholic. She had been subjected to verbal, emotional and physical abuse throughout her marriage.

145. She had sought happiness from an online dating service. She was apparently scammed and lost a considerable amount of money. She continued to pursue happiness on the dating site and was again scammed by a person she thought she was in love with. At the time she was employed as the Chief Financial Officer of a licenced Club. She was the sole signatory of the Club accounts. She loaned over $1 million to the male scammer, believing that he would in due course pay the funds back.

146. When it became clear that she had again been scammed and that the funds would not be repaid she confessed her offending to the Chief Executive Officer of the Club. She ultimately repaid some $300,000. The net loss to the club was approximately $700,000.

147. The offender pleaded guilty with respect to 27 unauthorised transactions. She received a discount of 25% on the basis of the guilty pleas. She provided assistance to the investigating authorities by preparing documentation which disclosed the full extent of the fraudulent transactions. This assistance was described as useful, truthful, complete, reliable, and timely. As a consequence, she received an additional 5% discount.

148. There were three separate counts relating respectively to defalcations of $20,000; $414,000; and $650,000. The indicative sentences, but for the 30% discount, would have been 5 months; 3 years; and, 3 years 6 months. After discount the indicative sentences were 3 months; 2 years 1 month; and, 2 years 5 months. Judge Grant imposed an aggregate sentence of 3 years and was satisfied that the sentence could be served by way of an Intensive Correction Order.

CONSIDERATION

182. The process of what is described as an instinctive synthesis requires the balancing of a variety of factors, some of which pull in opposite directions.

183. I note the purposes of sentencing which are expressed in s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW). They, of course, include ensuring that an offender is appropriately punished for the offending conduct and the weight to be given to specific deterrence, accountability for an offender’s actions and denunciation of the conduct, the need for general deterrence as well as the protection of the community and recognition of the harm done to a victim, and also the promotion of an offender’s rehabilitation.

184. Having had regard to s 5 of the Crimes (Sentencing Procedure) Act I am satisfied, having considered all possible alternatives, that no penalty other than imprisonment is appropriate in the present matter.

185. I propose to proceed by way of the imposition of an aggregate sentence pursuant to s 53A of the Crimes (Sentencing Procedure) Act 1999. It is necessary therefore that I indicate the sentence which would have been passed for each of the individual offences.

186. As I indicated earlier, I have grouped the 78 charges into separate categories by reference to the amount defrauded in each instance.

187. The indicative sentences for each of the charges in Category 1, that is offences involving less than $1,000 (15 counts: 83,133 – 137, 139 – 140, 144, 148, 150, 157 – 158, 162 – 163), is 2 months. I would aggregate the sentences in this category and the indicative aggregate will be a period of 6 months.

188. The indicative sentences for each of the charges in Category 2, that is offences involving an amount between $1,000 and $2,000 (41 counts: 45 - 46, 67, 77, 79, 81, 86 – 89, 95 – 98, 100, 109 – 110, 112 – 114, 116, 118 – 120, 122 – 129, 142 – 143, 146, 151 – 152, 154 – 155, 159, and 164) is 3 months. I would again aggregate the sentences in this category. The indicative aggregate will be a period of 12 months.

189. The indicative sentences for each of the charges in Category 3, that is offences involving an amount between $2,000 and $3,000 (10 counts: 31, 51, 105, 108, 111, 115, 117, 145, 156, and 172) is 4 months. The indicative aggregate will also be a period of 12 months.

190. The indicative sentences for each of the charges in Category 4, that is offences involving an amount exceeding $3,000 (12 counts: 49, 50, 121, 131, 138, 141, 147, 149, 153, 160, 168, and 170) is 6 months. The indicative aggregate will be a period of 2 years.

191. I bear in mind the principle of totality and impose an overall aggregate sentence of 3 years.

192. I have given careful consideration to the clear need for general deterrence with respect to fraudulent conduct by an employee in a position of trust. I have also given due recognition to the subsequent good conduct of the offender in further positions of trust with other employers during the period of delay which has elapsed since her offending was first discovered. This has clearly demonstrated appropriate rehabilitation and reduced concern for the protection of the community.

193. I have accordingly determined that the sentence can appropriately be served in the community.

194. The formal orders of the Court are as follows:

1. Ms Chung, you are convicted of the 78 matters before me. There being no other appropriate penalty, you are sentenced to a term of imprisonment for 3 years.

2. Pursuant to s 7(1) of the Crimes (Sentencing Procedure) Act 1999 the sentence imposed on you is to be served by way of an Intensive Correction Order. That sentence will commence on today’s date.

3. You must report to the Community Corrections Office at Sydney as soon as practicable but no later than 7 days from today’s date.

4. The standard conditions of the order apply: ss 73(1), 73(2)

1. You must not commit any offence; and

2. You must submit to supervision by a Community Corrections Officer

5. The following additional conditions apply: s 73A(2):

1. A community service work condition requiring the performance of community service work for 400 hours.

6. If you fail to comply with the conditions of this order, sanctions may be imposed by the Commissioner of Corrective Services or State Parole Authority. Those sanctions may include formal warning, imposing more stringent conditions, or it may include revocation of this order.

7. If the order is revoked, you may be required to serve all or some of the period of your sentence in fulltime custody.

8. Finally, you are now directed to attend the court registry where a copy of this order will be explained and given to you.

Summary of overpayments (184645, pdf)

Decision last updated: 17 July 2023