R v Hignett No. Sccrm-00-147

R v HIGNETT
[2000] SASC 280

CRIMINAL

REASONS FOR RULING

1................ GRAY J............ ROBERT JAMES HIGNETT, you have pleaded guilty to 70 counts of fraudulent conversion contrary to section 184 of the Criminal Law Consolidation Act 1935 (SA). These counts arise out of a course of conduct between 27 April 1993 and 23 November 1998. You have asked that a further 254 offences of fraudulent conversion be taken into account. These offences occurred between 3 May 1992 and 3 November 1998. All involved the same victim. The total sum fraudulently converted was $893,843.93.

In the mid 1980s, as an employee of a real estate firm, you were responsible for the management of two shopping centres owned by Mr Mackenzie, his wife and related companies. In April 1988, you left your employer to establish your own property management business. Mr Mackenzie had been impressed by your management. On setting up your own business, he retained you to manage his properties. You received considerable rewards. You were paid a fixed fee of between $25,000 and $30,000 per annum, and in addition, received amounts for letting commissions and bonuses. Beyond that, you received two loans totalling more than $35,000 at little or no interest.
You befriended Mr Mackenzie and his wife. Your victim trusted you to represent his interests honestly. His confidence and trust in you was partly due to the friendship that you fostered.
In October 1990, Mr Mackenzie, then aged 70, suffered a stroke. He became heavily, if not totally, reliant upon you for the proper management of both his properties. His friendship and trust in you, combined with his age, illness and disabilities, made him vulnerable. You recognised this vulnerability and took advantage of it for your personal gain. Your fraud went undetected for many years.
As part of your management duties you held deposit books. Each deposit book contained forms in triplicate. This allowed one copy to be left with the deposit book, another to be retained by the bank and the third was to be attached to the monthly statements which were provided to Mr Mackenzie. You would provide regular monthly statements, setting out rents received and banked. This allowed a reconciliation with the bank statements. These records gave the appearance that matters were in order. However, your dishonest plan involved taking rent from tenants and applying it to your own benefit. You did not fill out the deposit slips or bank the monies or cheques as your job required.
You utilised a number of dishonest methods to defraud Mr McKenzie. A number of tenants were persuaded to make cash payments to you. You represented to them that you would use the money for their rent payments. Instead, you applied the cash for your own purposes. Four counts, totalling $12,223.81, and 58 of the offences to be taken into account, totalling $92,404.01, relate to fraudulent transactions of this type.
The other counts and other offences to be taken into account involve a total of $789,216.11. The dishonest technique used, involved endorsing the back of the rent cheque with the words, "Please Pay RJ & VJ Hignett". You then forged Mr Mackenzie's signature and marked the back of the cheques with a stamp of "W D Mackenzie Nominees Pty Ltd". You had no authority to do this. A small number of tenants also made their rent cheques payable to you directly or to the family business, Matlea's Cafe. This business was registered in the name of yourself, your wife and your son. This was done because you falsely represented to them that you would forward their rent to their landlord.
In October 1998, Mr Mackenzie was approached by a person interested in buying one of his properties. As a result, in November 1998, he requested that you provide him with a rent schedule setting out the monthly rents payable by all tenants. In the schedule you attempted to conceal the fact that monies being deposited into Mr McKenzie's bank account did not equal the total monthly rents payable. A check of the figures led to the detection of your dishonesty.
You were spoken to by the police on 16 January 1999. You remained silent as was your right. Subsequently, but at an early date, your solicitor indicated to the DPP that the allegations were admitted and that guilty pleas would be entered. It is agreed that the early indication of your guilty plea has resulted in substantial resources being saved in the investigation and prosecution of your crimes. A statement of agreed facts has been put before me.
However, it cannot be said that you were fully candid in this matter. You gave information to the police as to the circumstances surrounding your offending, but you provided no explanation or reason for your conduct. Little was learnt of what you had done with the proceeds of your crimes. You provided only the sparsest and most general information.
You and your wife declared yourselves bankrupt in December, 1998 and the business of Matlea's Cafe was apparently insolvent by July 1999. Your son, who conducted that business, has also been declared bankrupt. You have made no restitution of the monies taken. It is possible that a small portion may be recovered by Mr Mackenzie through your bankrupt estate.
Your activities had a significant impact on Mr Mackenzie. The Victim Impact Statement describes the devastating effect of your crimes. These crimes have affected Mr Mackenzie's health, confidence, trust in others and quality of life. No one, least of all someone of Mr Mackenzie's advanced years and state of health, should have had to deal with the stress associated with such a gross breach of trust.
It is necessary that your head sentence and non-parole period reflect the gravity of your conduct and give effect to the consideration of general deterrence. In doing, so I have regard to the decisions of the Court of Criminal Appeal in the matters of R v Hunter[1]; R v Cavanagh[2] and R v Davies[3].
[1] (1983-84) 36 SASR 101
[2] CCA Judgment [1999] SASC 418
[3] (1996) 88A Crim R 226
I am informed that you are now 62 years of age and that you have been happily married for more than 36 years. You have adult children and grandchildren. Following matriculation, you joined the Commonwealth Public Service and remained there for more than 30 years. You performed duties in Australia and abroad and held senior positions in the Foreign Affairs Department in South-East Asia. When in your mid-forties, you left the public service and commenced work as a property consultant. You worked first as an employee and then on your own account. I am told that before these offences you led a blameless life and that you have no prior convictions. You accept that you acted in breach of trust. You regret what you have done and take responsibility for your crimes.
I was informed that there is a family history of Alzheimer's Disease. You have shown signs of short-term memory problems. This is a possible indicator, of Alzheimer's Disease but no more. Any connection between these matters and your offending was disavowed.
It was submitted that you were very unlikely to offend again and that you would respond well to parole conditions.
Your counsel submitted that you accept full responsibility for what you have done. You accept that these are serious offences that will necessitate a custodial sentence. The thrust of your counsel's submissions were directed to the fixing of your non parole period.
You have offered no explanation as to why you committed these crimes. It was simply submitted that you could not explain your conduct. In the absence any explanation, I conclude that you were motivated by greed.
You provided only the vaguest account of what you did with the proceeds of your crimes. It was said that you spent over $100,000 investing in your son's business and possibly $300,000 dollars on a vineyard investment held by you. No information was forthcoming in regard to the balance of the monies - many hundreds of thousands of dollars. I was told that you were not a gambler, and that you did not indulge in luxury items. It was put that you had always been anxious for your children's welfare. However, apart from the reference to monies being invested in your son's business, no details or figures were provided.
I accept what has been put on your behalf. I take account of all those matters. I have regard to your early plea of guilty and the extent to which you cooperated. I have regard to your age and the impact of a custodial sentence on your remaining years.
You have no previous convictions. This favourable matter must be heavily qualified by the fact that your conduct involved some 324 offences over a period of more than six years. Crimes such as yours are commonly committed by persons of apparent good standing. This is how trust and confidence are engendered in order to enable the exploitation of others to occur. It has been said that the deterrent effect on others in a similar position would be diminished if substantial credit for previous good character were given. This reasoning means that little allowance can be given to the fact that you are unlikely to re-offend - R v Davies[4].
[4] (1996) 88 A Crim R 226
Recently, this Court in R v Cavanagh[5] indicated that it was time that the severity of sentences for substantial frauds be increased. Doyle CJ said at [2]:
"... in my opinion, the time has arrived for an increase in the sentences imposed for substantial frauds of this kind for the reasons indicated by Debelle J. This was what Cox J foreshadowed in R v Davies (1996) 187 LSJS 467; 88 A Crim R 226. In future, a sentence of the order originally imposed by the sentencing judge would not be regarded by me as inappropriate."
[5] CCA Judgment [1999] SASC 418
At [20] Debelle J said:
"The punishment must, of course, fit the crime. In R v Davies (1996) 88 A Crim R 226 this court questioned whether the existing sentencing standards were adequate and said the time may well come when it is necessary to revise them 'for large-scale systematic breaches of trust': per Cox J at 230. There can be no standard sentence for this kind of offending. The manner in which breaches of trust of this kind can occur are many and varied. It is therefore rarely useful to compare one case with another unless the cases form part of a pattern of offending. Each case has its own individual characteristics which necessarily distinguish that case from other cases: see the observations of King CJ in Height (unreported, Court of Criminal Appeal, 22 June 1994, judgment no. S4634) and in Nicholls (1991) 160 LSJS 204 at 205. At one extreme, the offending may represent one or two single acts of folly where substantial, if not complete, restitution is made. At the other extreme the offending may represent a long period of offending over several years where the amount taken is extremely large and there is no prospect of restitution. One of the difficulties with this kind of offending is that it can remain undetected for a long time. In some cases it might never be detected."
I have considered these remarks before arriving at what I consider to be the appropriate sentence in your case.
Your crimes are very grave indeed. That gravity is compounded by the fact that they continued for more than six years. You preyed on the vulnerability of an elderly and disabled person whom you had befriended and whom you knew had placed implicit trust in your honesty and integrity.
I take a very serious view of your crimes. It is essential that I impose a very substantial head sentence to serve as a warning to others. If it were not for your pleas of guilty and your cooperation, a head sentence of twelve years would be appropriate. Having regard to these matters, I fix ten years as the head sentence. I fix a non parole period of six years. This sentence is to take effect from the 19th day of July 2000, being the occasion on which you were taken into custody.

LIST OF CITATIONS IN JUDGMENT AS THEY APPEAR

(1983-84) 36 SASR 101
CCA Judgment [1999] SASC 418
(1996) 88A Crim R 226
(1996) 88 A Crim R 226
CCA Judgment [1999] SASC 418

[2000] SASC 280

2 August 2000