R v McInnes

[2022] NSWDC 723

District Court

New South Wales

Medium Neutral Citation:	R v McInnes [2022] NSWDC 723
Hearing dates:	21 November 2022, 5 December 2022
Decision date:	05 December 2022
Jurisdiction:	Criminal
Before:	Colefax SC DCJ
Decision:	Aggregate term of imprisonment of 7 years with a non-parole period of 4 years
Catchwords:	CRIME - SENTENCE - Dishonestly obtain financial advantage by deception
Legislation Cited:	Crimes Act 1900 (NSW) s 192E(1)(b), s 178(B)(1).
Category:	Sentence
Parties:	Rex (Crown) Paul Bruce McInnes (Offender)
Representation:	Mr Bucksath (DPP) Mr Fordham (Counsel for the offender)
File Number(s):	2021/00277621
Publication restriction:	Nil

1. Paul Bruce McInnes, you appear for sentence today in relation to two principal offences, each being dishonestly obtaining a financial advantage by deception. 

2. Each offence involves the contravention of section 192E(1)(b) of the Crimes Act 1900 (NSW).

3. The maximum penalty for each offence is imprisonment for ten years and there is no standard non‑parole period. 

4. In addition to those two principal offences (which are respectively sequences 2 and 3) you have asked the Court to take into account one matter on a form 1, which I have certified. That matter is sequence 1. It is to be taken into account with sequence 2 and it is a matter of obtaining money by deception. That matter involves a contravention of section 178B(1) of the Crimes Act.

5. The circumstances surrounding your offending are contained in a document entitled Statement of Agreed Facts and, for my purposes this afternoon, they can be summarised as follows. 

6. The offending involving sequences 1, 2 and 3 were all committed whilst you were a senior employee of Rheem Australia.  You were relevantly the National Sales Manager or the General Manager, Sales. 

7. The offending took place over an 11 year period, from August 2007 to October 2018. 

8. The offending involved you making 53 individual fraud offences against your employer. The total amount of money that you (effectively) stole from your employer was a little over $2 million.

9. The offending was carried out by a relatively sophisticated scheme whereby you submitted false invoices for services which were, in fact, never provided. 

10. The scheme went undetected for so long because of: the trust that was vested in you by your employer; and the senior level within the company that you occupied. 

11. It is agreed between you and the Crown that, of that very significant sum of money (a little over $2 million), some of it was misappropriated by you and directed in the following manner. Approximately $540,000 was used to carry out renovations to, and mortgage repayments for, your primary residence at Menai.  An amount of almost $115,000 was used as a deposit and mortgage repayments for an investment property in Queensland.  A little under $230,000 was used as a deposit and a mortgage repayments for a second investment property in Queensland.  A little over $150,000 was used to buy a luxury boat.  Almost $125,000 was used to buy a holiday home at Wiseman's Ferry.  In late December 2018, at about the time that you were made redundant with Rheem, an amount of a little over $400,000 was transferred to a bank account controlled solely by your then wife. 

12. Sequence 2 involves an amount of $889,350.  Sequence 3 involves $795,300.  And the matter on the form 1 involves $413,957.50.  As I have said, the matter on the form 1 is to be taken into account with sequence 2.  By having regard to the quantum of the amount, it will result in a meaningful increase in the sentence for that principal offence.

13. You were arrested in relation to the offending on 29 September 2021.

14. It is necessary for the Court to make an assessment of the objective seriousness of each of the principal offence for an offence of its kind. In my view, each offence is above the mid-range for an offence of its kind. 

15. Each of the principal offences is additionally aggravated because: of the serious breach of trust that you engaged in concerning your employer; and by the sophistication of the criminality involved.

16. The Court has got very little information about your furhter subjective circumstances.  Apart from what is contained in the sentencing assessment report, the Court knows little about your background, your childhood, your education and the like. 

17. The sentencing assessment report noted that: you showed little remorse toward the victim; you did not give a lot of thought to the consequences of your actions; and your primary regret was for what you have brought about so far as your family is concerned.

18. You have a prior conviction for dishonesty, and that also was in connection with an employer.  You were convicted in 1993 and sentenced to a period of imprisonment for dishonesty offences.  It was revealed in your counsel's submissions today that those dishonesty offences involved your then employer, the State Rail Authority. 

19. You have no issues with drugs or alcohol. 

20. There is said to be some issue concerning gambling, but the evidence concerning that is of a very minimalistic kind, and I am certainly not satisfied, on the balance of probabilities, that this extended period of dishonesty over so many years, in so many transactions, was primarily motivated by any gambling issues.

21. The community is rightly concerned with theft by employees from their employers. That is because these offences are easily committed, but not easily detected.  In your case, you were highly trusted by your employer and you abused that trust on over 50 occasions, for the purpose of your own greed, and over many years. 

22. You sought to convey to the Court the impression that you had repaid in full that which you had stolen from your employer.  That was not correct.  You said (in passing) this morning that that restoration had come about as a result of legal proceedings.  Reference to the New South Wales Caselaw website will disclose what really went on in those legal proceedings.  You did not voluntarily make reparation to Rheem.  Rheem had to sue you.  It had to go to a contested hearing in the Equity Division of the Supreme Court.  There were then disputes about costs.  And it has emerged in the hearing today that Rheem has not even received 50% of the money to which it was entitled, including the legal costs to which you put it.

23. By having regard to what you said to the author of the sentencing assessment report concerning remorse and what you actually did in the Supreme Court, I am not persuaded, on the balance of probabilities, that you are genuinely remorseful for what you have done, as opposed to being sorry about being caught.

24. It is difficult to form an assessment of your prospects of rehabilitation, Mr McInnes.  There being no clear explanation, other than greed, for what you did.  And in circumstances where you have been imprisoned before for stealing from an employer - and where I am not persuaded that you are genuinely remorseful - I regard your prospects of rehabilitation as being guarded.

25. It is said by you (a person with a history of dishonesty) that you have a heart condition.  I am prepared to accept that on the balance of probabilities,  not least because I have some evidence from Dr Walker (a treating cardiologist) that you do have some form of heart condition.  But I do now know from your counsel's helpful written submissions that, whatever that condition is, contrary to the impression you tried to convey in the witness box, it can, in fact, be satisfactorily dealt with in custody.

26. You have an aged mother, and until recently it had been your intention for your brother, Andrew, to look after her whilst you were in prison.  Andrew has had his own unfortunate health issues in the last few weeks and he is no longer able to do that.  Specifically, however, no submission is made on your behalf about undue hardship to third parties as a consequence of your impending incarceration.  But I have, nevertheless, taken it into account in coming to the decision to grant you special circumstances.  I shall expand upon that shortly, but it is one of the factors that I have taken into account.

27. In your case, general deterrence (that is, fixing at sentence that will deter others from doing what you have done) and specific deterrence (that is fixing a sentence that will deter you from yet again offending against an employer) are fully engaged.

28. I intend imposing an aggregate sentence.  You pleaded guilty at an early opportunity and the law requires you to receive a discount of 25% for the early plea.  That discount will be applied to the indicative sentences underpinning the aggregate sentence. 

29. You have not served any time in prison before today in relation to these matters and therefore the sentence will date from today. 

30. Ordinarily the non‑parole period should be 75% of the head sentence, unless a finding of special circumstances is made.  As I have indicated, I am going to make finding of special circumstances: first, because imprisonment will be harsher for you than for others because of the condition of your mother;  secondly, because of your heart condition;  thirdly, because of your age; and fourthly, because of the period of time since you have last been in custody.

31. Insofar as sequence 2 is concerned, and taking into account the matter on the form 1, except for your plea of guilty, the indicative sentence would have been imprisonment for seven years.  After the discount of 25%, the indicative sentence is imprisonment for five years, three months.

32. Insofar as sequence 3 is concerned, except for your plea of guilty, the indicative sentence would have been imprisonment for six years.  After the discount of 25%, the indicative sentence is four years, six months.

33. Having taken totality into account, I impose an aggregate sentence of imprisonment of seven years, to date from today. 

34. Having made a finding of special circumstances, I fix a non‑parole period of imprisonment of four years, to date from 5 December 2022, and which will expire on 4 December 2026.  I fix a balance of three years, to date from 5 December 2026 and which will expire on 4 December 2029.

35. You will now go with the officers, thank you.

Decision last updated: 20 March 2023