R v Suri
[2004] SASC 80
•2 April 2004
R v SURI
[2004] SASC 80Court of Criminal Appeal: Perry, Bleby and Sulan JJ
PERRY J. The appellant appeals against the sentence imposed upon him in the District Court following his plea of guilty to six counts of fraudulent conversion as a trustee, three counts of false pretences and twelve counts of fraudulent conversion.
The offences were committed over a period of about four and a half months, between May and September 1998.
The sentencing judge imposed a sentence of imprisonment of 3 years and 6 months, against which he fixed a non-parole period of 1 year and 6 months. Both were directed to commence from the date upon which sentence was pronounced, that is, from 22 January 2004.
The appellant was the principal and sole director of Australian Paper Products Pty Ltd (“APP”). That company factored debts to an entity known as Metro Factors (“Metro”).
In effect, Metro bought APP’s debts, or such of them as were made the subject of the agreement, at a discount of 3 per cent. It was a term of the factoring agreement that APP would advise its debtors of the agreement and direct payment of the debts to Metro. If the debtor paid the debt direct to APP, its obligation was to endorse the cheque to Metro, or pay to Metro the amount of the debt.
In breach of the factoring agreement, the appellant deposited cheques from debtors the subject of the agreement into his own business trading account, and converted the proceeds to his own use or to the benefit of his business.
As to three counts of false pretences, the appellant factored fictitious debts with Metro, with the result that he or his company fraudulently received moneys from Metro for debts which did not exist.
The precise calculation of the amount defrauded by the appellant is not entirely clear, but it appears that it was an amount of between approximately $156,000 and $166,000.
The proprietors of Metro suffered significantly as a result of the frauds.
In his notice of appeal, the appellant complains that the sentencing judge erred in failing to suspend the sentence of imprisonment, and that in any event, the sentence was manifestly excessive.
At the time he was sentenced the appellant was 48 years of age. He was born in India and migrated to Australia in 1977.
After running a retail business for some years, at some time before 1997 he purchased APP.
In 1998, when APP experienced cash flow difficulties, he entered into the factoring arrangement with Metro.
The sentencing judge accepted that the motivation of the appellant in committing the frauds was the expression of an endeavour to trade out of his financial difficulties. It appears that the appellant hoped eventually to pay back the money.
However, towards the end of the period over which the frauds were committed, in September 1998, it was obvious that the appellant could not trade out of the situation in which he found himself. To use the expression of the sentencing judge, “everything collapsed”. At about the same time, he got wind of the fact that Metro had been alerted to the fact that there were irregularities.
The appellant promptly disappeared to India with his wife and son.
However, he returned voluntarily to Australia in the beginning of 1999.
There was then some delay in proceeding with the charges against him, due in part to his state of health. It appears that he suffered a brain stem stroke leading to deafness and some weakness in his hands and legs. His medical condition has been complicated by depression which set in subsequently.
The appellant survives on a disability support pension, together with a family allowance paid to his wife. At the time of sentence he was living in Melbourne.
To his credit, when initially charged, the appellant pointed out through his solicitors to the DPP that the first six counts were incorrectly laid, in that they should have been charged as breaches by a trustee of moneys due to Metro, rather than as straight fraudulent conversion. Subsequently, an ex officio information was laid correcting the formulation of the charges.
Allowing for the time taken in effecting that correction, the appellant pleaded guilty at the earliest possible stage.
Furthermore, the sentencing judge sentenced the appellant on the basis that he was satisfied that the appellant was not guilty of what he described as a planned, systematic or long-term fraud motivated by personal greed, or by a desire to live a life of luxury. Rather, he accepted that the fraud was motivated by a desire to keep his business going.
The appellant made partial restitution, in that he repaid $50,000.
The maximum penalty for fraudulent conversion by a trustee is 7 years imprisonment, for false pretences 4 years imprisonment, and for fraudulent conversion 7 years imprisonment.
In his sentencing remarks the sentencing judge expressly referred to the application made by counsel on behalf of the appellant to suspend any sentence of imprisonment which might be imposed. He said that he had considered the submissions and the matters upon which they were based, but concluded that “in the circumstances they together constitute insufficient good reason” for him to suspend the sentence of imprisonment.
The sentencing judge indicated that as a starting point, had it not been for the plea of guilty, he would have sentenced the appellant to a single sentence of imprisonment of 5 years. He reduced that to 3 years and 6 months on account of the plea.
In support of his argument that the sentencing judge erred in failing to suspend the sentence, Mr Edwardson, who appeared for the appellant, drew attention to the following factors, which he described as “compelling factors in favour of suspension”:
“(a)Pleas of guilty at the first available opportunity.
(b)Disclosure of the defects in the prosecution case.
(c)The offending was not a planned systematic and long term fraud motivated by personal greed or the desire to live a life of luxury.
(d)Restitution in the sum of $50,000.
(e)The appellant was genuinely contrite and remorseful.
(f)There was no significant likelihood of re-offending.
(g)The offending occurred almost 5 years ago.
(h)The appellant’s history of poor health.”
Mr Edwardson criticised the expression used by the sentencing judge in dealing with the question of suspension, namely that the various factors to which his attention had been drawn in that respect “together constituted insufficient good reason” for suspension.
In my opinion, that criticism is unfounded. By using that expression, the sentencing judge was simply indicating that he did not regard the various factors said to justify suspension, as amounting to “good reason”[1] to do so.
[1] Criminal Law (Sentencing) Act 1988 s 38(1).
This Court has emphasised on a number of occasions that “systematic fraud committed over a period of time by a person who is in a position of trust will ordinarily attract a substantial sentence of imprisonment”.[2]
[2] R v Powell (2001) 81 SASR 9 per Perry J at 16 par 35, citing R v Ashdown (1994) 72 A Crim R 63, R v Chisholm (1985) 122 LSJS 230 and R v Cavanagh (1999) SASC 418.
Furthermore, in sentencing for crimes of this kind, the need for general and personal deterrence is a paramount consideration: see R v Chisholm (supra) per King CJ:[3]
“The systematic course of dishonesty undoubtedly calls for a substantial sentence and there is, moreover, the important aspect of deterrence. The courts have a responsibility to impose sentences upon those who abuse the trust which is placed in them which will operate as a deterrent to others in a position of trust who might either for psychological or any other reason experience the temptation to take what does not belong to them.”
[3] Ibid 232.
Consideration of the need for deterrence is an element both in determining the length of the sentence to be imposed and in determining whether the sentence should be suspended. See, for example, the observations of Kirby J in Dinsdale v R,[4] made in the context of comparable Western Australian legislation:[5]
“[85] ... the same considerations that are relevant for the imposition of the term of imprisonment must be revisited in determining whether to suspend that term.[6] This means that it is necessary to look again at all the matters relevant to the circumstances of the offence as well as those personal to the offender. .... This necessitates the attribution of ‘double weight’ to all of the factors relevant both to the offence and to the offender - whether aggravating or mitigating - which may influence the decision whether to suspend the term of imprisonment.[7]
[86]Adopting this approach, then, permits attention to be given not only to the circumstances personal to the offender but also to the objective features of the offence. These may, in a particular case, outweigh the personal considerations of rehabilitation and mercy. They may require that the prison sentence be immediately served, despite mitigating personal considerations.” (emphasis added)
[4] (2000) 175 ALR 315 at 336.
[5] The Sentencing Act 1995 (WA).
[6] Thomas, Principles of Sentencing, 2nd ed, 1979, pp 244-5; R v P (1992) 39 FCR 276 at 285; 11 ALR 541 at 551.
[7] R v Liddington (1997) 18 WAR 394 at 402 per Ipp J.
It follows that general deterrence must be accorded appropriate weight, both in determining the sentence and in addressing the question whether to suspend it.
Furthermore, where, as is the case here, general deterrence is a dominant or substantial consideration, this will weigh more heavily in the scales as a factor tending against suspension than would otherwise be the case. This is because a custodial term of imprisonment will ordinarily operate as a greater general deterrent than a suspended sentence,[8] even although a suspended sentence is a real punishment.[9]
[8] See my discussion of this question in Sweeney v Corporate Security Group (unreported), 22 September 2003, judgment No [2003] SASC 324.
[9] See Wood v Samuels (1974) 8 SASR 465 per Walters J at 468; Paterson v Stevens (1992) 57 SASR 213 at 216-217; DPP (Cth) v Carter [1998] 1 VR 601; Wood (2002) 130 A Crim R 518 and Peart v Police (unreported) Perry J, 15 August 2003, judgment No [2003] SASC 274.
In this case, the sentencing judge had regard to the general discretion to suspend the sentence, addressed the factors urged upon him to that end, and concluded that in all the circumstances he was unable to be satisfied that there was good reason to suspend the sentence.
I have carefully considered the arguments put forward by Mr Edwardson in support of the appeal on this ground, but I am not satisfied that the decision not to suspend was outside the range of sentencing options properly available to him, or that the exercise of his discretion miscarried in any way.
Mr Edwardson only faintly argued the other ground of appeal, namely that the sentence was, in any event, manifestly excessive.
This was a serious course of fraudulent conduct committed over several months. It only came to light when Metro received an anonymous phone call which alerted them to the appellant’s conduct. As I have said, when he got wind of that, he chose to leave the jurisdiction, although he returned soon afterwards.
While it is to his credit that he made restitution in a substantial amount, there was still a substantial residual loss suffered by Metro.
In my opinion, both the head sentence and the non-parole period were, if anything, modest. It has not been demonstrated that they were manifestly excessive.
I would dismiss the appeal.
BLEBY J. I agree that the appeal should be dismissed. I agree with the reasons of Perry J.
SULAN J. I agree that the appeal should be dismissed, for the reasons given by Perry J.
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