Wills v The Queen

[2014] NSWCCA 253

Court of Criminal Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Wills v R [2014] NSWCCA 253

Hearing dates:

20 October 2014

Decision date:

10 November 2014

Before:

Hoeben CJ at CL at [1]
R A Hulme J at [2]
Davies J at [3]

Decision:

1. Leave to appeal granted.

2. Appeal dismissed.

Catchwords:

CRIMINAL LAW - conspiracy to money launder - money laundering - receiving corrupt benefits - sentence - executive of Woolworths - elaborate scheme involving off-shore companies - benefits received over 18 month period - offender unrepresented at sentence hearing - offender with serious health issues - refusal of second adjournment - offender lodged detailed written submissions with Sentencing Judge - whether procedural unfairness in refusing adjournment - whether sentence manifestly excessive

Legislation Cited:

Confiscation of Proceeds of Crime Act 1989 (NSW)
Crimes Act 1900 (NSW)
Crimes (Sentencing Procedure) Act (1999) NSW

Cases Cited:

Dietrich v The Queen (1992) 177 CLR 292
R v Battiato [1999] NSWCCA 44
R v Egerton (Unrep, Court of Criminal Appeal NSW, 8 August 1997)
R v Giam (No 2) [1999] NSWCCA 378
R v Houghton [2000] NSWCCA 62
R v Houlton [2000] NSWCCA 183
R v Lambrinos (Unrep, Court of Criminal Appeal NSW, 17 July 1998)
R v Newey (Unrep, Court of Criminal Appeal, NSW, 23 August 1990
R v O'Neill (Unrep, Court of Criminal Appeal NSW, 24 July 1996)
Weir v R [2011] NSWCCA 123

Category:

Principal judgment

Parties:

David Michael Wills (Applicant)
Crown

Representation:

Counsel:
F Coyne (Applicant)
N Adams SC & S Palaniappan (Crown)
Solicitors:
Hammond Solicitors (Applicant)
Solicitor for Public Prosecutions (Crown)

File Number(s):

2009/80902

 Decision under appeal 

Date of Decision:

2013-01-18 00:00:00

Before:

Haesler DCJ

File Number(s):

2009/80902

Judgment

1. HOEBEN CJ AT CL: I agree with Davies J.

1. R A HULME J: I agree with Davies J.

1. DAVIES J: After a trial lasting more than three months a jury found the Applicant guilty on 7 September 2012 of:

(1) Fourteen counts of receiving a benefit corruptly, as an agent of Woolworths Ltd, for showing favour to an Israeli company Az-Ben Electronics Ltd contrary to s 249B(1) Crimes Act 1900 (NSW). The maximum penalty is seven years' imprisonment.

(2) One count of money laundering contrary to s 73(2) Confiscation of Proceeds of Crime Act 1989 (NSW). The maximum penalty is 20 years imprisonment;

(3) One count of conspiring with others to engage in money laundering transactions. This is a common law conspiracy charge and the penalty is at large.

1. The corrupt benefits totalling $1,395,950.50 were received between June 1997 and December 1998.

1. The Sentencing Judge imposed an aggregate sentence of seven years consisting of a non-parole period of four years to commence on 18 January 2013 and expire on 17 January 2017. The indicative sentences were as follows:

Count 2: Money laundering conspiracy - 5 years.

Count 6: On 4 June 1997 receive a corrupt benefit of $137,160 - 3 years.

Count 7: On 22 January 1998 receive a corrupt benefit of $22,891- 1 year.

Count 8: On 20 June 1997 receive a corrupt benefit of $83,374 - 2 years.

Count 10: On 18 February 1997 receive a corrupt benefit of $ 10,000 - 6 months.

Count 14: On 21 February 1997 receive a corrupt benefit of $10,000 - 6 months.

Count 17: On 26 February 1997 receive a corrupt benefit of $176,210 - 3 years.

Count 19: On 7 April 1998 receive a corrupt benefit of $86.854.79 - 2 years.

Count 22: On 13 May 1997 receive a corrupt benefit of $31,000 (SRT) - disposed of pursuant to s 10 A Crimes (Sentencing Procedure) Act 1999 by recording a conviction and no other penalty.

Count 24: On 10 June 1997 receive a corrupt benefit of $141,346.47 - 3 years.

Count 27: On 1 July 1997 receive a corrupt benefit of $19,204 - 6 months.

Count 30: On 7 October 1997 receive a corrupt benefit of $24,000 - 6 months.

Count 33: On 29 August 1997 receive a corrupt benefit of $557,551 - 4 years.

Count 35: On 10 September 1997 money laundering $250,000 - 3 years.

Count 36: On 3 December 1997 receive a corrupt benefit of $67,000 - 1 year.

Count 37: On 11 December 1997 receive a corrupt benefit of $25,000 - 6 months.

1. The Applicant now seeks leave to appeal on two grounds as follows:

1. His Honour erred in failing to afford procedural fairness to the offender in the sentencing proceedings.

2. The total sentence is in all the circumstances is manifestly excessive.

Facts concerning the offences

1. In addition to the offences in respect of which the Applicant was sentenced, he was also charged as follows:

Count 1: That the Applicant and the Hendersons conspired with each other and other persons to cheat and defraud Woolworths Ltd in respect of supply and installation of computer hardware. This was a common law offence.

Counts 3, 4 and 5: As an officer of a public company act with the intent to cheat and defraud contrary to s 176A Crimes Act 1900. The maximum penalty is imprisonment for 10 years.

Count 20: Money laundering contrary to s 73(2) Confiscation of Proceeds of Crime Act 1989.

1. The jury returned verdicts of not guilty on counts 1, 3 and 4. The jury failed to agree on counts 5 and 20 and there were no further proceedings in relation to those offences. In relation to the alleged co-conspirators, the jury returned verdicts of not guilty on all counts relating to Peter Henderson and on most of the counts relating to Caroll Henderson.

1. The Applicant was a senior executive at Woolworths in charge of its Management Services Division. In the mid-1990s he was looking for a new Point of Sale system for all Woolworths supermarkets. He proposed that Woolworths should develop their own in conjunction with an Israeli company, Az-Ben. The company's principal was Benzion Weissman. Az-Ben was represented in Australia by the co-accused Peter Henderson who, through his company Smart Retail Terminals, provided Woolworths with computer software and hardware. The second co-accused, Carroll Henderson managed SRT with her husband Peter. The Az-Ben product was known as APOS 2000.

1. The Sentencing Judge recognised that the jury, by its verdicts, did not accept that the Applicant's decision to push Az-Ben's product, APOS 2000, was corrupt from the outset. However, he noted that the jury must have accepted that, having chosen Az-Ben and APOS 2000, the Applicant received corrupt benefits from Az-Ben's principal, for having shown favour to Az-Ben in its dealings with Woolworths. The payments to the Applicant were funded by money that Az-Ben received from Woolworths.

1. In respect of many of the offences, the corrupt benefits were paid by the Hendersons. The Sentencing Judge found that the jury gave the benefit of the doubt to the Hendersons but he said that they must have accepted that the corrupt benefits were paid by other co-conspirators in the money laundering conspiracy. The jury must have accepted that the Applicant received corrupt benefits from Mr Weissman for having shown favour to Az-Ben associated with the continuation and implementation of contracts with Woolworths.

1. The conspiracy involved the use of companies incorporated in the British Virgin Islands and bank accounts in Jersey to hide the source and receipt of the corrupt benefits.

1. The money laundering transaction involved the use of overseas accounts to hide the source of funds that were used to purchase a $250,000 Mercedes Benz car.

Subjective features

1. The Applicant is aged 64 years. Apart from one drink driving offence he had not come to the notice of the courts. His Honour took into account his good character although noting that he used his position to commit the offences. The Probation and Parole report noted that the Applicant had worked all his life most often in senior corporate positions or in his own businesses. He is now retired.

1. The Sentencing Judge noted that he had some assets but what he had was likely to be spent on legal expenses or seized to compensate his victim.

1. The Sentencing Judge noted that the Applicant had significant health problems including severe coronary artery disease. He also suffered from Type II Diabetes. The Sentencing Judge found that there was no evidence his reasonable needs could not be met in custody. He said, however, that he did not overlook the fact that the realities of prison life would, because of his health, make his time in custody harder and more burdensome than most other prisoners.

Remarks on Sentence

1. Having made the factual findings summarised above the Sentencing Judge then proceeded to consider matters relevant to the sentence. He said that it was appropriate to fix an aggregate sentence. This was because the way the Crown had run its case, with the corrupt benefits received as particulars of a conspiracy it failed to prove, the counts which resulted in convictions had to be seen as an example of individual payments for a variety of continuing corrupt acts by the Applicant. His Honour said that it was hard to distinguish one corrupt benefit from another apart from the amount of money received.

1. In relation to accumulation and concurrence his Honour said that there was a single, albeit extended, episode of criminality and in some instances

a sentence for one offence could comprehend those for another. However, he said that there had to be some accumulation given the period of time over which the offences occurred, the different nature of the corrupt benefit and the money laundering offences.

1. The Sentencing Judge took account of the considerable delay in the bringing of the charges in the matter due in part to a lack of police resources. He noted, however, that one reason for the delay was the complexity of the arrangements put in place by the Applicant to prevent discovery of the offences and to thwart any investigation.

1. With regard to the Applicant's submissions the Sentencing Judge said:

[40] It is clear from his submissions that Mr Wills not only fails to appreciate the reasons for the jury verdict but also shows no insight into the serious criminality of his conduct. His justifications for his criminal action do not accord with the evidence led at trial and accepted by the jury. I cannot take account additional factual matters [sic] raised only in submission and inconsistent with the jury verdicts....

1. In relation to the objective seriousness of the offending, the Sentencing Judge said that each crime individually and/or in total:

(i) involved a gross breach of trust;

(ii) took place over a lengthy period of time;

(iii) was motivated by extreme greed;

(iv) involved considerable sums of money;

(v) while initially opportunistic, involved planning and significant planned efforts to avoid detection;

(vi) had a considerable impact on the Applicant's employer;

1. In addition, the Sentencing Judge said that the Applicant exploited his senior position in the company and used that position to avoid detection and to commit the crimes.

1. The Sentencing Judge said that the maximum penalty for an offence gave some indication of the seriousness with which the community viewed the offences and provided some guidance to a sentencing judge. He noted that the s 249B offences had a maximum penalty of seven years. He noted, wrongly, that the s 73(2) offence had a penalty of ten years when it was in fact 20 years.

1. The Sentencing Judge said that he was satisfied that no sentence other than imprisonment was appropriate. That was because the offending involved deliberate, calculated, systematic and repeated crimes by a respected and senior executive in breach of trust, and resulted in very large losses to Woolworths over a period of time.

Ground 1: The Sentencing Judge erred in failing to afford procedural fairness to the offender in the sentencing proceedings

1. The Applicant had been represented by counsel throughout the trial. However, he was not represented at the sentence hearing and he did not give evidence. He prepared written submissions in response to the Crown's submissions. Those written submissions proceeded on the assertion by him that he was innocent of the charges notwithstanding the jury's verdicts.

1. The matter first came before the Sentencing Judge on 14 November 2012 for the sentencing hearing. On that occasion, in addition to the Crown and the Applicant being present, Woolworths was present through its counsel in respect of the compensation claim made by it.

1. The Sentencing Judge asked the Applicant if he was ready to proceed with the sentence proceedings on that day. The Applicant said that he was not. He said he had "received some very significant issues" relating to his health and that he was facing a triple bypass and very significant surgery "which has already started". He had been in hospital the previous day and he said he had a full medical report in regard to what his treatment would entail over the next two months. It would involve multiple surgical procedures involving his heart and possible liver surgery. The Applicant informed his Honour that he had been told he needed to have the operation by Christmas or he would not last the year. He said he would like the sentence proceedings adjourned until he was in a better position to represent himself.

1. The Applicant tendered a medical report from Dr Nigel Grebert, a general practitioner, which appeared to be a referral by Dr Grebert to a specialist at the San Clinic at Wahroonga. It diagnosed severe coronary artery disease, a fatty liver and Type II Diabetes. The medical report did not, as the Sentencing Judge pointed out to the Applicant, give any timetable for any operations so that, if he was minded to do so, the Sentencing Judge would be in a position to choose an appropriate adjournment date. His Honour also informed the Applicant that the sentence hearing had been adjourned for a lengthy period of time after the verdict to enable the Applicant and his lawyers to prepare material for sentence and to provide a pre-sentence report.

1. In the face of continuing opposition from the Crown because of the inadequacy of the material provided by the Applicant the Sentencing Judge said he was prepared to adjourn the sentence proceedings to 18 January. His Honour went on to say this:

I can indicate this, that unless you are actually in intensive care, and even if you are, it would be necessary for me to have a full and comprehensive medical report with a timetable and prognosis, do you understand that?

1. His Honour also said:

If it's as urgent as you say they should be completed by January and we can only be optimistic as I'm sure you will be. But if there are complications I will need to know in advance, as will the Crown, of any medical reports that you wish to rely upon. Do you understand that?

1. The Sentencing Judge then received material in relation to the compensation application. His Honour advised the Applicant that he ought to go through that material before January and provide a response to it in writing. His Honour provided detailed information to the Applicant about the nature of the compensation claim and matters that the Applicant should relevantly consider in relation to it. He went on to say:

I can say that subject to the most extraordinary medical evidence this matter will be proceeding on 18 January.

1. On 14 January 2013 the Sentencing Judge's Associate received a report from Dr Anil Aggarwala dated 21 December 2012 apparently sent by the Applicant. The report in its entirety read:

Mr Wills underwent angioplasty and stenting to his right coronary artery yesterday. It was a long and difficult procedure. He was being discharged from hospital today and I plan to see him in about a month's time and he will require further angioplasty and stenting procedures to the left anterior descending artery.

1. The matter then came back before the Sentencing Judge on 18 January 2013. The Applicant again appeared in person. The report of Dr Aggarwala was marked as an exhibit. His Honour also noted that his Associate had received an email from the Applicant saying that he had received treatment for colon cancer and that he wished to make an adjournment application. The Sentencing Judge asked him if he had any medical reports that would support his application for an adjournment apart from the report of Dr Aggarwala but the Applicant said that he did not.

1. In the circumstances, the Sentencing Judge refused the Applicant's adjournment application.

1. The Applicant submitted that by not participating in the sentencing proceedings or the compensation proceedings he showed that he was not able to represent himself properly at that time. The Applicant pointed to the Sentencing Judge's assessment of his submissions (set out at [20] above) as demonstrating his lack of capacity. That lack of capacity on the Applicant's part exacerbated by his serious health issues at the time amounted to a lack of procedural fairness.

1. In Weir v R [2011] NSWCCA 123 Garling J (with whom Macfarlan JA and Johnson J agreed) said:

[65] The particular form which procedural fairness dictates may vary. That is because the content of the requirement of fairness may be affected by what is said and done during the proceedings: Re Minister for Immigration & Multicultural and Indigenous Affairs; ex parte Lam (2003) 214 CLR 1 at [34] per Gleeson CJ. ...

[66] The key to determining whether there has been a breach of the requirement of procedural fairness is to ascertain the consequence of any departure from the dictates of proper procedure because what is ultimately in issue is whether unfairness has resulted from the process: See Lam at [34]. The concern of the law is to avoid practical, and not merely theoretical, injustice: Lam at [37].

[67] One common basis for demonstrating that practical injustice and unfairness has occurred is where an individual has lost the opportunity to make submissions to the decision maker in opposition to a proposed course and in support of a course which he urges: Lam at [36]; Button at [18].

1. A reading of the transcript of both 14 November 2012 and 18 January 2013 shows that the Applicant did address the Court on both occasions about the substance of the charges brought against him. In those circumstances, and in the light of the written submissions he prepared and relied upon, it cannot be said that he did not participate in the hearing.

1. At no stage did the Applicant seek an adjournment in order to obtain legal representation. Nor did the Applicant assert that he did not understand what was put against him in the Crown's written submissions. His own written submissions answered paragraph by paragraph what was contained in the Crown's submissions. It may be accepted that the Applicant's written submissions do not accept his guilt as the jury found, and they contain the sort of assertions and allegations against those who gave evidence against him that are not uncommonly seen in cases where the convicted person does not accept any wrongdoing on their own part. None of this material suggests any lack of capacity on the part of the Applicant who was obviously a person of considerable intelligence, ability and business acumen as his position with Woolworths demonstrated and was highlighted by the complexity of the wrongdoing.

1. In the absence of an application for an adjournment to obtain legal advice and in circumstances where it cannot be said the Applicant was under any relevant incapacity, the matters discussed in Dietrich v The Queen (1992) 177 CLR 292 are not applicable.

1. There was no procedural unfairness in not adjourning the sentencing proceedings for a second time in circumstances where the Applicant had no further medical evidence to justify such an adjournment. This is particularly so since it had been made clear to him, when his first application for adjournment was granted, what would be necessary in the event that a further application was made.

1. I would reject this ground of appeal.

Ground 2: The total sentence is in all the circumstances manifestly excessive

1. The Applicant submitted that because the main conspiracy charge was not proved against him he stood only to be sentenced for receiving corrupt payments from a supplier to his employer. These payments arose after that supplier's contract with his employer was entered into, and in circumstances where it could not be said that the supplier did not provide a good product or proper services to the employer. The Applicant drew attention to other matters noted by his Honour including the delay in bringing the charges, the Applicant's age, illness and behaviour since the offences so that the Sentencing Judge was confident he would not re-offend, his prior good character, his difficult personal circumstances in relation to his divorce and the fact that his assets would be likely to be spent on legal expenses and compensation.

1. All of these matters were said to mean that the aggregate sentence of seven years with a non-parole period of four years was manifestly excessive, particularly when regard was had to fraud type offences in cases considered by this Court at or about the time of the offending.

1. It is necessary to say something briefly about the cases upon which the Applicant relies.

1. In R v Egerton (Court of Criminal Appeal (NSW), 8 August 1997, Unrep) the applicant on appeal had been convicted on five counts, while being a director of a body corporate, of misapplying the company's cheques and cash for his own purposes. The total amount misapplied was in the order of $3 million. He was sentenced to a minimum term of 18 months with an additional term of six months. The criminal enterprise lasted only about five weeks and was relatively unsophisticated with a clear money trail left. His appeal was dismissed with the Court saying that the Judge imposed the most lenient sentence the circumstances allowed.

1. Subsequently, in R v Houghton [2000] NSWCCA 62 the respondent to a Crown appeal sought to rely on the sentence in Egerton. Houghton involved 26 counts of fraudulently applying company property whilst being a director. The maximum penalty was 10 years' imprisonment. He was sentenced to 26 concurrent terms each of two years' imprisonment consisting of an 18 month minimum term and an additional term of six months. The total amount defrauded over a three and a half year period was $1,376,293. The Court said that the sentences imposed were below the bottom of the available range of sentencing discretion. However, the residual discretion was applied on the Crown appeal and the Court did not interfere with the sentence. When discussing the sentence in Egerton the Court said that that case produced a sentence which, if the Crown had appealed, would have merited serious consideration for being increased by this Court. They added that Egerton should not be used as a yardstick in a case of this kind.

1. R v Lambrinos (Court of Criminal Appeal (NSW), 17 July 1998, Unrep) was a Crown appeal against a sentence of 12 months periodic detention for obtaining a cheque in the sum of $598,952.16 from the Australian Tax Office payable to a corporation and applying the funds for his own purposes. The sentence on the appeal was increased to a period of three years periodic detention. Two of the Judges of this court (Smart J and Ireland J) said that in their opinion a period of full time custody was required but because it was a Crown appeal they were prepared to agree that the imprisonment be served by periodic detention. It should be further noted that this was a one-off offence and did not involve a scheme, a conspiracy or systematic offending.

1. In R v Battiato [1999] NSWCCA 44 the applicant on the appeal had defrauded amounts totalling $490,000 over a period of three years. She was an employee of a bank and used her position to alter the nature of certain accounts so that she could access the funds. She was sentenced to a minimum term of two and a half years and an additional term of two years. The sentence was reduced on appeal only because the Sentencing Judge had not given sufficient discount for the assistance provided by the Applicant. The sentence was reduced to a minimum term of two years and three months with an additional term of one year and nine months. Simpson J said that the sentence imposed at first instance was relatively lenient having in mind the duration and continuity of the offences. Smart J would have dismissed the appeal but for the material concerning the Applicant's assistance. It may be observed that the amount defrauded was less than one third of the amount in the present case.

1. R v Giam (No 2) [1999] NSWCCA 378 cannot be considered a comparable case by reason of its procedural complications. The respondent to that Crown appeal was only sentenced to a minimum term of 14 months with an additional term of 16 months on one count where he was awaiting retrial on six other counts in respect of which he had served a ten month custodial sentence. Allowance was made for that time in the imposition of the new sentence.

1. R v Houlton [2000] NSWCCA 183 was a Crown appeal in respect of a sentence of three years imprisonment to be served by way of periodic detention for five counts of fraudulent misappropriation for which the Respondent pleaded guilty. The maximum penalty was 7 years imprisonment. The Respondent received what the Sentencing Judge described as "the greatest discount" for the plea of guilty. The considerable delay in bringing the criminal proceedings to a conclusion was also taken into account. There were also very strong subjective features. By the time the appeal was heard the Respondent had served a not inconsiderable part of the sentence of periodic detention. In all of those circumstances this Court declined to uphold the Crown appeal. The amount of the defalcations was approximately $347,000.

1. Bearing in mind the maximum penalty for the money laundering offence, that the maximum penalty for the conspiracy was at large, the amounts involved, the planning and the period of the offending, I do not consider that these cases are of any assistance in determining whether the present sentence fell within the appropriate range of sentences open to the Sentencing Judge.

1. Two other cases suggest that the sentence imposed by the Sentencing Judge was well within the range of appropriate sentences. In R v Newey (Court of Criminal Appeal (NSW), 23 August 1990, Unrep) the Applicant pleaded guilty to 23 counts of obtaining a valuable thing by deception. The maximum penalty was penal servitude for five years. The overall minimum term was imprisonment for four years six months with an additional term of one year and six months. The total sum dishonestly obtained was $818,299.00. This Court was of the view that there could be no possible challenge to the overall sentence and that the Applicant had been treated favourably. The sentence was said to be well within a legitimate exercise of sentencing discretion.

1. In R v O'Neill (Court of Criminal Appeal (NSW), 24 July 1996, Unrep) the Applicant sought leave to appeal against a minimum term of six years and six months with an additional term of three years and six months in respect of 12 counts of dishonestly obtaining money by deception from his employers. The maximum penalty was imprisonment for five years. The amounts involved $1,063,000 and were committed over a period of approximately three years. This Court said that in looking at other cases they were unable to find by reference to those cases that the sentences imposed by that Sentencing Judge were outside his Honour's sentencing discretion.

1. The Applicant sought to distinguish these cases, particularly because the offending occurred well before the commission of the present offences, because of the different offences charged and because of the different circumstances of the offending and the offenders. Those distinctions may be accepted. However, they both involved systematic dishonesty by persons in a position of trust. The offences carried lower maximum penalties than all the offences charged in the present case and the amounts involved were considerably less than in the present case. They are at least an indication that the sentence imposed by Judge Haesler was well within his sentencing discretion. The Judge's misapprehension of the maximum penalty for the money laundering offence was favourable to the Applicant. The sentence was not manifestly excessive.

1. I would also reject this ground of appeal.

Conclusion

1. I propose the following orders:

1. Leave to appeal granted.

2. Appeal dismissed.

**********

Amendments

25 November 2014 - representation amended

Amended paragraphs: coversheet

Decision last updated: 25 November 2014