R v Dubois

R v DUBOIS
[2004] SASC 79
Court of Criminal Appeal: Perry, Bleby and Sulan JJ

PERRY J: I agree that the appeal should be dismissed for the reasons published by Sulan J.
BLEBY J: I agree that the appeal should be dismissed. I agree with the reasons of Sulan J.
SULAN J:
Introduction
The appellant pleaded guilty to thirty one counts of false pretences. He requested that a further twenty one offences of a similar nature be taken into consideration. The maximum penalty for each offence is four years imprisonment. The offending occurred over approximately five years and involved numerous victims. The amount involved was in the order of $2,000,000. The appellant was sentenced to twelve years imprisonment, with a non-parole period of eight years. The sentence was to take effect from 8 February 2002, the date upon which the appellant was taken into custody. He has appealed against the sentence.
Background
The offences occurred when the appellant was conducting his own business of a financial planner, which involved giving advice to clients in the area of insurance, investments, financial brokerage and mortgages. Prior to establishing his business in 1991 the appellant had been a partner in a financial planning group. He employed a number of staff and he had a large client base of about 800 clients, many of whom had followed him when he commenced his own business. Some clients had become personal friends of the appellant and trusted him implicitly.
In addition to his business of financial planning, the appellant conducted a number of other businesses which required monies to be injected into them. In 1995 he purchased a property for approximately $2,000,000. That property required a re-fit. Substantial funds needed to be obtained to meet the financing costs. Some of the monies received from clients were used for that purpose.
The appellant enjoyed an enhanced lifestyle, including travelling overseas with his family. He used monies that were taken from his victims to maintain his business ventures, to pay business debts, to make unauthorised investments with inadequate or no security and to pay personal expenditure. He was financially ambitious and he took financial risks.
The appellant is 53 years of age. He is married with three children. Prior to commencing his own business, he had worked as a financial advisor, having partially completed a course in accounting. He has had a good work record.
The sentencing judge accepted that the appellant’s pleas of guilty have saved significant time and expense in a difficult investigation. He has saved his victims the trauma associated with having to give evidence.
The judge concluded that the appellant was motivated by greed. There can be no other explanation for his conduct. The judge gave some examples to illustrate the seriousness of the suffering that the appellant has caused. It is not necessary to detail the circumstances of individual cases. The fraud has had a devastating effect upon many of his victims. The offending has caused them much anxiety. Their health has suffered.
His victims included people who had retired and who relied on his advice. They did not have skills in financial management. They did not question him and, on many occasions, he lied to them about their investments. He assured them that their investments were secured when he had misused their money. Their money has been lost.
As to one client, which provides aged care housing and hostel accommodation, the appellant misappropriated about $220,000 in an unauthorised investment. The investment was unsecured and the money has been lost. The organisation has been unable to upgrade their nursing home and hostel facilities.
The head sentence
The judge indicated that a starting point of fifteen years imprisonment was appropriate. He reduced the sentence to twelve years imprisonment, having regard to the appellant’s pleas of guilty, his contrition and remorse and his cooperation with the authorities. The judge set a non-parole period of eight years.
It is put on behalf of the appellant that the sentence is manifestly excessive. In particular, it is submitted that the starting point of 15 years is too high. Miss O’Connor, who appeared for the appellant, accepted that the offending was extremely serious but submitted that the sentencing judge had given too much weight to aggravating features of the offending, and had failed to have sufficient regard to the fact that it had been accepted that the appellant had embarked upon this course of fraudulent conduct with a genuine belief and intention that he would repay his victims when the businesses which he was supporting with his victims’ funds became profitable. Miss O’Connor submitted that the appellant’s conduct was less culpable than that of a person who steals from their clients never intending to repay, or a person who takes money from their clients to maintain a gambling addiction when, objectively, there is no prospect of repayment, even though the perpetrator believes, or hopes, that their fortune will change and their victims can be repaid.
The appellant may have embarked on this fraudulent conduct believing that his victims would be repaid when the fortunes of the businesses into which their money was being used changed, but it is difficult to understand how the appellant could have continued to genuinely have held that belief. As it became necessary for him to take further monies from clients in order to repay earlier debts to maintain his business enterprises and his lifestyle, he could only have been deluding himself if he thought that, by some fortune, the businesses would turn around and that he would be able to repay the hundreds of thousands of dollars that he had by then taken. The offending continued over a period of nearly five years, throughout which time the appellant continuously lied to his clients.
In any event, little weight can be given to a submission that a person guilty of crimes of this nature is entitled to some credit because he entertained a belief and intention that, at some time in the future, he would repay his victims. In the first place, such expressed intention can only ever be subject to an overriding proviso that he will do so if he can. If, in the future, he cannot, he knows that his intention will not be fulfilled. He knows that his intention will change if other pressures supervene.
Secondly, while such intention may be marginally less culpable than the intention of a thief who never has any intention to repay, that is more than outweighed by the fraud and deception used to induce an unwitting victim voluntarily to part with money in favour and for the benefit of the perpetrator, believing that the perpetrator is acting at all times in the victim’s interest.
The gravamen of the offending is the gross breaches of trust and the deceit which accompanied the misuse of clients’ funds so that the appellant was able to maintain an affluent lifestyle and give an impression of an honest, successful, professional adviser and businessman. That cannot be ameliorated by a stated intention to repay if things turn out favourably for the appellant. I agree with the observations of Debelle J in R v Cavanagh.[1]
“This kind of offending is premeditated, deliberate and repetitive. The fact that it involves deceit only serves to underline the criminal wilfulness of the conduct. In cases of this kind, the description of the crime as fraudulent conversion should not disguise the fact that it is a form of stealing – in this case, as in others, stealing on a grand scale. Deterrence must therefore be a predominant factor in the sentence.”[2]
[1] (1999) SASC 418 (Unreported)
[2] Ibid at para 21
As this court has said on numerous occasions, systematic fraud committed over a period of time by a person who is in a position of trust will attract substantial sentences of imprisonment: see R v Powell.[3] I can only repeat what was said by Cox J in R v Davies: [4]
“Crimes of this sort are usually committed by respectable people of good standing – that is how they come to be in the positions of trust which they are able to exploit to their own advantage. The deterrent effect of the 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.”[5]
[3] (2001) 81 SASR 9 at 16 per Perry J
[4] (1996) 88 A Crim R 226
[5] Ibid at 229
He went on to say:
“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.”[6]
[6] Ibid at 230
Doyle CJ, who agreed, said that the time may well have come to review the standards of punishment appropriate for systematic breaches of trust when large amounts of money are involved.
The previous good character of an appellant can only have limited weight in cases of this nature, as it is only people of good character who are in a position to act professionally for their clients, and it is usually those of good character who are able to place themselves into a position of trust and in situations in which clients blindly rely upon their advice and judgment.
In Cavanagh’s case, Debelle J, with whom Doyle CJ and Wicks J agreed, made it clear that the amount taken is a significant matter when determining the length of the sentence. The amount involved in Cavanagh’s case was $240,000.
The sentencing judge in this case had regard to matters personal to the appellant. He gave the appellant credit for his pleas of guilty and for the expense and time saved in the ongoing investigation and prosecution. He acknowledged that, by his plea, the appellant had saved his victims the trauma associated with giving evidence and that, by his plea, the appellant had demonstrated contrition. He had regard to all relevant matters personal to the appellant. The reduction of the head sentence from 15 years to 12 years, having regard to those factors, was appropriate. He concluded that the only explanation for the appellant’s conduct was that he was motivated by greed. In all, including the offences that the sentencing judge took into account, there were over 50 separate incidents of fraud. In each of the cases, the appellant stole from his clients. In my view, the starting point of 15 years imprisonment was within the range for this offending. The resultant head sentence of 12 years imprisonment cannot be said to be manifestly excessive.
Non-parole period
Miss O’Connor submitted that the non-parole period was manifestly excessive. She argued that if a lengthy head sentence was appropriate to give effect to the principles of general and personal deterrence, then the sentencing judge failed to give sufficient allowance for the appellant’s personal circumstances in setting a non-parole period of eight years. She submitted that the requirement for general deterrence can be satisfied by setting a lengthy head sentence with a relatively low non-parole period, having regard to the appellant’s previous good character and his good prospects of rehabilitation. She relied on the decision of Power v R.[7] Smart AJ said:
“In Corbett 52 A Crim R 112 at 117 this Court, comprising Gleeson CJ, Priestley JA and Matthews J understandably said: “Nevertheless, a feature of past sentencing for ‘white collar’ crimes involving fraudulent abuse of trust, and sometimes involving fraud on the public purse, has been the imposition of lengthy head sentences, but with a substantial gap between head sentence and non-parole periods or minimum terms. This has probably been the consequence of a desire on the part of the courts, on the one hand, to reflect the need for general deterrence and, on the other hand, to give due account to the fact that the offenders involved frequently have no prior criminal history, are not likely to re-offend, and have good prospects of rehabilitation.
The reasons for that policy apply with particular force in the present case. Further, there is some explanation as to why the applicant acted as she did”.”[8]
[7] [2002] NSWCCA 244 (Unreported)
[8] Ibid at paras 38-39
As appears from what I have already said, this court takes a different view about the effect of previous good character on sentences for offending of this nature and of the inferences that may properly be drawn from that past history.
Insofar as it can be suggested that Power’s case is authority for the proposition that there should be an overriding policy in cases of large-scale white-collar crime that the non-parole period should generally be reduced because the head sentence alone satisfies the requirement of general deterrence, I cannot agree. General and personal deterrence not only apply to the setting of a head sentence, but also to the non-parole period. In The Queen v Creed[9], King CJ said:
“In fixing a non-parole period, as in fixing a head sentence, a judge has to bear in mind the purposes for which sentences are imposed. The non-parole period, no less than the head sentence, must reflect the basic consideration of justice that the punishment should fit the crime, having regard both to the offence and the offender, and it must reflect the community’s sense of justice, what in some of the cases is called “the moral sense of the community”. For that reason alone the non-parole period, no less than the head sentence, should be properly proportionate to the gravity of the crime.”[10]
[9] (1984-85) 37 SASR 566
[10] Ibid at 568
The non-parole period must reflect the requirement of punishment and general and personal deterrence: see R v Power;[11] Dinsdale v R.[12] In Davies case, Cox J[13] made it clear that usually the non-parole period as well as the head sentence should reflect the gravity of the crimes and give effect to the paramount consideration of general deterrence in the case of large systematic fraud: see also R v Chisolm.[14]
[11] [2003] SASC 288 (Unreported)
[12] (2000) 175 ALR 315 per Kirby Jat 336
[13] Supra at 229
[14] (1985) 122 LSJS 230 at 232
It cannot be said that a non-parole period of eight years was outside the range for offending of this nature. Nothing in the appellant’s case justified a reduction of the non-parole period below that imposed. No restitution has been made. Although some of the victims have recovered some funds, as these monies came from a third party that cannot be said to be a mitigating factor: see R v Hodby.[15] All relevant factors were considered by the sentencing judge.
[15] (1988) 143 LSJS 466
The appeal must be dismissed.
JUDGMENT CITATIONS

LISTED IN ORDER OF APPEARANCE IN JUDGMENT

[1] (1999) SASC 418 (Unreported)
2 Ibid at para 21
3 (2001) 81 SASR 9 at 16 per Perry J
4 (1996) 88 A Crim R 226
5 Ibid at 229
6 Ibid at 230
7 [2002] NSWCCA 244 (Unreported)
8 Ibid at paras 38-39
9 (1984-85) 37 SASR 566
10 Ibid at 568
11 [2003] SASC 288 (Unreported)
12 (2000) 175 ALR 315 per Kirby J at 336
13 Supra at 229
14 (1985) 122 LSJS 230 at 232
15 (1988) 143 LSJS 466

[2004] SASC 79

2 April 2004