Woods v The Queen

[2018] NSWCCA 261

Court of Criminal Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:	Woods v R [2018] NSWCCA 261
Hearing dates:	1 June 2018
Date of orders:	23 November 2018
Decision date:	23 November 2018
Before:	Bathurst CJ at [1]; Leeming JA at [51]; Adamson J at [52]
Decision:	(1)   Grant the applicant leave to appeal.  (2)   Dismiss the appeal.
Catchwords:	SENTENCING – Subjective considerations on sentence – Mental illness – sentencing judge found that mental health conditions were not causally connected with the offending – whether the sentencing judge erred in failing to give weight to evidence of mental health conditions
Legislation Cited:	Crimes Act 1900 (NSW)
Cases Cited:	Director of Public Prosecutions (Cth) v De La Rosa (2010) 79 NSWLR 1; [2010] NSWCCA 194 Johnston v The Queen [2017] NSWCCA 53
Category:	Principal judgment
Parties:	Linda Gaye Woods (applicant) The Crown (respondent)
Representation:	Counsel: A Evers (applicant) T Smith (respondent)   Solicitors: Legal Aid NSW (applicant) Solicitor for Public Prosecutions (respondent)
File Number(s):	2017/4293
Publication restriction:	Nil
Decision under appeal	Court or tribunal: District Court of New South Wales Jurisdiction: Criminal Citation: N/A Date of Decision: 4 August 2017 Before: McLennan DCJ File Number(s): 2017/4293

HEADNOTE

[This headnote is not to be read as part of the judgment]

Between 2011 and 2016, Ms Linda Gaye Woods was employed by a transport and warehousing business. She was in charge of subcontractor payments for the business. In the course of her employment, Ms Woods defrauded the business of $809,510.07 by altering the invoices issued by subcontractors and redirecting parts of the payments to her own personal bank account. After an internal investigation, the business discovered the fraudulent transactions and reported the matter to police. During a police interview, Ms Woods made a full confession of her offending.

At the sentencing hearing, Ms Woods explained that she used the money from the fraudulent transactions to maintain a number of horses, despite initially using it to pay off personal debts and to fund her partner’s father’s care in a nursing home. Ms Woods’ relationship with her horses was described as an “addiction” or “passion” during the hearing. Ms Woods also relied on two reports made by a psychologist and a psychiatrist, which gave evidence that the applicant suffered from two mental health conditions at the time of the offending.

The sentencing judge sentenced Ms Woods to a term of imprisonment of five years, with a non-parole period of three years. Ms Woods sought leave to appeal from the sentence on the ground that the sentencing judge had failed to give effect to her mental health conditions in imposing a sentence.

The Court held that no error had been identified in the approach of the sentencing judge. The Court found that he had expressly taken both reports into account when sentencing, and was entitled to reach the conclusion that the mental health conditions were not causally connected to the offending. Further, the Court found that the sentencing judge did not err in not taking the “addiction” or “passion” which motivated the fraudulent transactions in the present case into account as a mitigating factor: [41]-[49] (Bathurst CJ); [51] (Leeming JA); [52] (Adamson J).

Johnston v The Queen [2017] NSWCCA 53, referred to.

Judgment

1. BATHURST CJ: Ms Linda Gaye Woods (the applicant) seeks leave to appeal against a sentence imposed on her for the offence of dishonestly obtaining a financial advantage by deception, contrary to s 192E(1)(b) of the Crimes Act 1900 (NSW). The maximum penalty for the offence is 10 years imprisonment.

2. The applicant pleaded guilty to the offence and was sentenced to a term of imprisonment for five years, comprising a non-parole period of three years commencing on 4 August 2017 and expiring on 3 August 2020, with a balance of term of two years expiring on 3 August 2022. The sentence was arrived at after allowing a 25% discount for an early guilty plea.

3. The sole ground of appeal was that the sentencing judge “erred in failing to give effect to evidence of a mental condition when passing sentence”.

Factual background

4. The facts constituting the commission of the offence were outlined by the sentencing judge in a manner which was not controversial.

5. The applicant was employed by a large transport and warehousing business called Freight Specialists. She was employed in the Tamworth branch of the business and was in charge of payments to its subcontractors. During the period between 8 April 2011 and 30 August 2016 in the course of her employment, the applicant effected 155 fraudulent transactions, with the total amount defrauded amounting to $809,510.07.

6. The fraudulent transactions were committed when the applicant received an invoice from a subcontractor. The applicant would process the payment legitimately and then use an accrual on the account to make a second payment to her own bank account. She did this by changing the subcontractor’s banking details to her own and then processing the payment with the same subcontractor’s name attached to the paperwork. After the payment was processed, the applicant would then change the banking details back to the subcontractor’s actual banking details. The applicant would also alter the original invoice in the accrual payment by whiting out the subcontractor’s banking details and photocopying the invoice to make it appear as though there were no banking details attached. With one exception of a payment of $6,585, the payments were made into the applicant’s Westpac bank account.

7. The applicant’s employer became aware of possible fraudulent transactions in July 2016 and ultimately notified the police. On 8 August 2016, the applicant disclosed her offending to her partner. The sentencing judge found, and it was not disputed, that it was apparent that the reason for her disclosure was that the guilt she felt as a result of her fraudulent activity was “simply becoming too much to bear”.

8. On 5 January 2017, she was interviewed by the police and made full admissions of the fraud. The sentencing judge noted that she told police that the money that was fraudulently taken from the business was used to help alleviate her financial hardship. She told police that the money was also used to pay “for a number of horses she had for training, veterinary bills, and services to impregnate her horses”.

The sentencing judgment

9. The sentencing judge set out the facts as I have outlined them. The sentencing judge then described the offence as a “serious white collar crime”. He noted: first, the amount of money the subject of the fraud; second, that each separate fraudulent activity took “planning and forethought”; third, that the applicant was in a “significant position of trust”, being the person in charge of subcontractor payments; fourth, that, because of her key role, the breach of that trust was of “significant gravity”; and fifth, that there was a “multiplicity of acts involved in the fraud”, since there was a total of 155 fraudulent payments extending over approximately six years.

10. However, the sentencing judge said that he regarded her “voluntary disclosure to her partner of a fraud that was already being investigated, in conjunction with her subsequent full admissions to the police, as being immediate demonstrations of her remorse”.

11. The sentencing judge noted that the applicant initially told the police that the money was used to pay “for a number of horses she had for training, veterinary bills, and services to impregnate her horses”, as I have noted at [8] above. The sentencing judge stated that the applicant’s passion for horses could equally answer the description of “an addiction or an indulgence”. He noted that an aspect of a reference given by the applicant’s sister showed that the applicant believed that “training a successful racehorse would provide an avenue to pay back the money she had been stealing”.

12. The sentencing judge noted that, in the evidence of the applicant given before him, the applicant explained her attachment to horses as having “almost a therapeutic quality about it”. He noted that the applicant agreed that her “therapeutic relationship with her animals became an addiction”, but he said that, so far as the law was concerned, “addiction, whether to drugs, gambling, or anything else, while often explaining behaviour, rarely excuses offending behaviour”. He said that, in those circumstances, it could not be relied on as a “matter of mitigation in this case”, although it had “obvious relevance in assessing her prospects of rehabilitation and likelihood of reoffending”.

13. The sentencing judge referred to the applicant’s statement to a psychologist, Ms De Santa Brigida, that she “initially started to fraudulently obtain funds to cover the costs of nursing home care for her partner’s father” and that she had “outstanding debts, including a $70,000 personal loan, which she incurred as a result of her previous marriage relationship”. The sentencing judge noted that it was “apparent that, once she realised how easy it was to commit a fraud, for those particular reasons to do with financial hardship and to fund her [partner’s] father’s nursing home facility, it became a simple matter for her to indulge her addiction/passion, however one wishes to describe it”, and having done so, it became a “simple matter … for her to chase her losses”.

14. The sentencing judge described Ms De Santa Brigida’s report as a “comprehensive and objective document” providing “material relevant to the background circumstances” of the applicant, which he accepted.

15. The sentencing judge set out the following passage from the report of Ms De Santa Brigida:

“Ms Woods reports a happy and stable childhood and there is no indication of abuse during her developmental years. At the age of 18, Ms Woods was involved in a motor vehicle accident and her girlfriend, Renee Wickham, was killed in the accident. Ms Woods suffered significant injuries in the motor vehicle accident and she was unable to work for eight months, following her discharge from hospital. It was has been asserted that Ms Woods has suffered significant, long-term psychological problems resulting from the motor vehicle accident, most notably the development of post-traumatic stress disorder. The results of the testing indicate PTSD and it has been noted that she evidences dissociative symptoms of depersonalisation. It has been noted that Ms Woods presents with classic symptoms of trauma, including symptoms of avoidance and reactivity.”

16. The sentencing judge stated that, having regard to the circumstances of the accident, the applicant’s age at the time, and the injuries she suffered, the conclusion reached by Ms De Santa Brigida was “completely unsurprising”.

17. The sentencing judge also set out the following passage from Ms De Santa Brigida’s report:

“Following her divorce when she was aged 30, Ms Woods sought help for depression and she was prescribed Zoloft medication for many years, which she stopped taking around 2011. The patient health summary from Dr Walker, the treating psychiatrist, notes that she may have been depressed since the motor vehicle accident in 1989. Dr Walker notes the possible diagnosis of complicated grief reaction and this has been listed as the differential diagnosis. It has been noted that on the risk assessment Ms Woods falls in the low range for the possibility of further recidivism.”

18. The sentencing judge said that he accepted the conclusion in that passage of the report. He noted that, apart from driving offences, the applicant had no criminal history. He also said that, if she had committed previous offences of this nature, it would not have been expected that she would have been placed in a position of trust such as the one which she held.

19. The sentencing judge stated that, having regard to her criminality, there was “no alternative” to a sentence of imprisonment. He said that the length of the term was informed by the need for general deterrence. He described general deterrence for offences of this nature as “very important”, as was the need to “properly punish a fraud of this magnitude and duration”.

20. The sentencing judge said that the sentence was “tempered” by his conclusion that the applicant was “unlikely to reoffend in this way again and that her prospects of rehabilitation are good”. He said that he noted an “offer to make restitution by her superannuation fund”, but stated that this “sacrifice” had yet to be made, so that, as prospected restitution, it could not figure significantly in his sentencing decision.

21. The sentencing judge stated that the applicant had “some real personal issues which she needs to come to grips with to facilitate her reintegration in a meaningful way into the life of the community”. He stated that he was referring specifically to her post-traumatic stress disorder and depression. He stated that, while neither could be said to be “causally connected to her offending”, both were relevant to her “general functioning in a background sense”, and that, to help the applicant “reengage” with life, a finding of special circumstances would be made “so that a longer period of supervision can be provided for”.

22. The sentencing judge noted what he described as an ongoing “therapeutic relationship” which the applicant had with Dr Walker, her treating psychiatrist. Apart from this comment, he said nothing further about the evidence of Dr Walker which was before him.

The ground of appeal

23. Because of the nature of the ground of appeal, it is necessary to refer in a little greater detail to the report of Ms De Santa Brigida and to set out some portions of the report of Dr Walker.

24. Ms De Santa Brigida expressed the view that the applicant met the criteria for “Major Depressive Disorder, single episode, moderate, with anxious distress” and “Panic Disorder” under the “nomenclature of DSM 5”. She described the manner in which trauma affects the development of the human brain in the following terms:

“Over time, the pattern is developed and an individual with a history of significant trauma operates from the impulsive part of the brain to the survival part of the brain, which results in them deeming everything in their environment poses a danger to them. This results in the individual continually experiences a disturbance to their decision-making processes, heightened levels of arousal and fear response and interference with their mood with flat affect and low mood. This heightened state of arousal results in the individual having no self-soothing skills and no ability to calm their internal affective states.

As previously stated Ms Woods ceased taking her Zoloft medication stat at sometime around 2011. Dr Walker notes that it may have been in 2012. It is beyond this author’s knowledge base to comment on the effect of stopping Zoloft stat and whether this may have influenced her decision in relation to the current offences.”

25. The conclusions reached by Ms De Santa Brigida in her report are set out in the passages from her report which the sentencing judge extracted in his judgment and which I have set out at [15]-[17] above.

26. Dr Walker provided an initial report dated 7 November 2016 (after a single consultation with the applicant), and a more substantive report dated 31 May 2017. In the latter, he made the following remarks:

“3.   Is Ms Woods currently suffering from a psychological or psychiatric illness and if so, what is her diagnosis?

My working diagnosis is of major depressive disorder from a 1989 motor vehicle accident, in which Ms Woods was seriously injured and her friend died. She described panic attacks for ten years, but I was unsure whether these impaired her function.

…

5.   Are you able to provide an opinion as to whether Ms Woods was suffering from a psychological or psychiatric illness over the period of time in which the offences were committed?

Ms Woods described symptoms of major depressive disorder during the time she offended.

6.   If so, what impact (if any) did such psychological or psychiatric condition have on Ms Woods’ offending behaviour?

I do not know how to determine what impact if any Ms Woods’ depression had on her offending behaviour. I assume that she was promoted in 2011 into the accounts payable role, suggesting that depression did not impair her at work. I do not know whether depression affected her performance and/or attendance at work during or after 2011. She sought treatment after telling her employer of her theft in early August 2016. It is beyond my area of expertise to explain the apparent internal control failure that allowed her to both create vendor accounts and approve vendor payments.

Ms Woods told me that she spent the money she stole on credit card debts, friends and training thoroughbred racehorses. She took an antidepressant (sertraline) from when she separated from her husband in 2004, until 2012. It would be useful to review her general practitioner’s notes from 2011 to 2016 to better understand her mental state over those years. During treatment she has consistently appeared anxious and remorseful.

7.   What impact, if any, will a fulltime custodial sentence have on the psychological or psychiatric illness (if diagnosed), as well as the effectiveness of any treatment options?

One principle of sentencing is to deter others from committing crime. It is common knowledge that full-time custodial sentences involve a range of adversities for the convicted. Depression is common amongst prisoners, especially those awaiting sentencing. Anecdotally, antidepressants are commonly prescribed to prisoners. Supportive psychotherapy might not be available to her in custody. A full-time custodial sentence is likely to make her more depressed, at least in the short-term.”

The submissions

27. The applicant submitted that the sentencing judge failed to take into account the principles relating to the sentencing of offenders suffering from mental illness set out in Director of Public Prosecutions (Cth) v De La Rosa (2010) 79 NSWLR 1; [2010] NSWCCA 194 (De La Rosa). She submitted that no reference was made to these principles by the sentencing judge, although they were referred to in her written submissions at the sentencing hearing. She submitted that this suggested that they were not applied.

28. The applicant referred to the sentencing judge’s remarks during the course of the sentencing hearing to the effect that the applicant’s association with horses seemed to be of “genuine therapeutic value” which had “spiralled into addiction”, and his reference to what was said in Johnston v The Queen [2017] NSWCCA 53 at [36]-[38] (Johnston) to the effect that “the fact that offences were committed to feed a gambling addiction will generally not be a mitigating factor”. She submitted that an approach based on Johnston was erroneous because there was also “clear evidence that the applicant suffered from a mental condition” irrespective of any addiction arising out of her involvement with horses.

29. The applicant referred to her unchallenged evidence that the original motivation for taking money from her employer arose from difficulties in paying debts arising from a previous marriage and the need to pay for the care of her partner’s father after he suffered a stroke. She noted that her evidence was that her initial motivation for keeping horses was to save them, not to make money from them. She accepted that the decision to involve herself with younger horses had “contributed to her financial problems”, but submitted that her reason for continuing to fund them was that, if she did not, she would lose them.

30. The applicant submitted that her case was not based on the existence of an addiction spiralling out of control, but rather, the fact that there was clear evidence of mental conditions, being a major depressive disorder and post-traumatic stress disorder. She pointed to the fact that the only consideration of this by the sentencing judge was his statement that, while neither could be said to be “causally connected to her offending”, both were relevant to her “general functioning in a background sense”.

27. The applicant submitted that, “arguably”, if both the post-traumatic stress disorder and depression were relevant to her “general functioning at the time of offending”, and impacted on her “judgment and/or decision making”, then the conditions were relevant to the assessment of her moral culpability, although she accepted that the time over which the offending took place and the multiple steps which it involved would reduce the impact on moral culpability which they might otherwise have had.

28. The applicant submitted that the evidence from Ms De Santa Brigida was that her “decision making process, and the ability to respond to stress were impaired” and that she was “likely to act impulsively to stressful situations”. She submitted that, while the offending conduct involved “multiple acts over a long period of time”, it did not necessarily follow that “each act was not an impulsive, poorly reasoned response to a threat (being financial stress)”.

29. The applicant submitted that, even if there was no “nexus” between her mental conditions and her offending, this would not render the principles stated in De La Rosa irrelevant. She submitted that her mental conditions would operate to reduce the otherwise appropriate sentence due to her reduction in moral culpability, a reduction in the weight to be given to general and specific deterrence, and the fact that a custodial sentence “would be likely to make her more depressed”. It was submitted that the failure to take these matters into account constituted an error.

30. The Crown noted that the sentencing judge “specifically referred to the applicant’s mental conditions of post-traumatic stress disorder and depression”, and that he had considered the evidence of Ms De Santa Brigida that the applicant had suffered “significant long term psychological problems resulting from the motor vehicle accident in 1989 when her friend was killed” and that the applicant had sought help for depression following her divorce.

31. The Crown submitted that the finding of the sentencing judge that neither of the mental conditions from which the applicant suffered was causative of the offending was “consistent” with the report of Dr Walker, who, it was noted, did not specifically address the issue of whether or not there was a causal connection between the applicant’s mental conditions and the offending. The Crown submitted that, in those circumstances, the sentencing judge’s conclusion was open on the evidence.

32. The Crown also submitted that the evidence did not establish that the applicant was not an “appropriate vehicle” for general deterrence, and pointed out that the offences continued for an extended period and that the applicant committed them “with knowledge of what she was doing and appreciated the gravity of her actions”. In relation to specific deterrence, the Crown pointed to the remarks of the sentencing judge that the applicant was “unlikely to reoffend” and that her “prospects of rehabilitation were good”. The Crown submitted that it was clear that, in those circumstances, the sentence contained a “minimal, if any, component of specific deterrence”.

33. The Crown also submitted that the evidence “fell short of establishing that the applicant’s mental conditions would make her time in custody more onerous than an inmate unaffected by such conditions”.

34. The Crown also submitted that it was clear that the sentencing judge gave “some weight” to the applicant’s mental conditions as part of his instinctive synthesis, and noted his remarks that both mental conditions were relevant to the applicant’s “general functioning in a background sense”.

35. The Crown submitted that the sentencing judge correctly described the applicant’s motivation for the offending, and noted the applicant’s evidence at the sentencing hearing, where she stated that the horses were “sort of like an addiction” and that she had put the horses into training in the belief that, if she could win a race, she would have the funds to start paying back the money she had taken. The Crown submitted that the sentencing judge recognised that she initially stole the money to pay for the expenses of her partner’s father’s care and her personal debts.

36. In these circumstances, the Crown submitted that error had not been established.

Consideration

41. The difficulty confronting the applicant is that the sentencing judge expressly took into account the conclusions reached by Ms De Santa Brigida and Dr Walker. As I pointed out at [21] above, he concluded that, notwithstanding their reports, that neither the post-traumatic stress disorder nor the depression from which the applicant suffered were “causally connected to her offending”.

42. The sentencing judge was entitled to reach this conclusion. Neither Ms De Santa Brigida nor Dr Walker stated that the applicant’s mental conditions in any way contributed to her offending such that it would reduce her moral culpability.

43. The applicant submitted that the sentencing judge should have found that her moral culpability was reduced because of the evidence of Ms De Santa Brigida that she was likely to act “impulsively” in stressful situations. However, with respect, it is difficult to describe a fraud committed on multiple occasions, involving a degree of “planning and forethought”, as being the product of impulsive actions. The sentencing judge was entitled to conclude to the contrary.

44. The applicant has also submitted that the sentencing judge fell into error in describing the reason for the offending as an “addiction” or “passion” spiralling out of control, as distinct from the mental conditions identified by Ms De Santa Brigida and Dr Walker. However, once the applicant’s mental conditions were excluded as a cause of the fraudulent transactions, it would seem to inevitably follow that those transactions, apart from the earlier ones, were to enable the applicant to pursue her passion for horses.

45. In Johnston at [36]-[38], I pointed out that “the fact that offences were committed to feed a gambling addiction will not generally be a mitigating factor at sentence … even when it is pathological”. I also pointed out that, even if such an addiction “may explain the fall into serious criminal conduct”, it would be a “rare case” that it provides a basis for mitigation of penalty, particularly in cases where what occurred was not impulsive, but involved careful observation and planning. Johnson and Fagan JJ agreed with that conclusion at [76]-[77]. The same might be said of the “addiction” or “passion” which was said to be the reason for most of the fraudulent transactions in the present case.

46. Nor can it be said that the applicant was not an “appropriate vehicle” for general deterrence. She occupied a position in which she was entrusted with dealing with relatively substantial sums of money and used that position of trust to systematically defraud her employer. It is important to send a clear signal that such conduct merits significant punishment.

47. Further, the evidence does not establish that the applicant’s depression would make her incarceration more onerous than it otherwise would have been. The comment made by Dr Walker that “depression is common amongst prisoners, especially those awaiting sentencing”, and his statement that a “full-time custodial sentence is likely to make [the applicant] more depressed, at least in the short-term”, is not sufficient to establish this proposition.

48. Finally, it must be remembered that the sentencing judge referred in detail to the report of Ms De Santa Brigida, and stated that it was a “comprehensive and objective document” which provided “material relevant to the background circumstances” of the applicant. That, combined with his comment that the mental conditions from which the applicant suffered were relevant to her “general functioning in a background sense”, shows that the sentencing judge took these conditions into account as part of his instinctive synthesis.

49. It follows that no error has been demonstrated. In these circumstances, it is unnecessary to deal with the admissibility of the supplementary report of Ms De Santa Brigida, which was only sought to be tendered if the Court came to resentence the applicant.

Conclusion

50. In the result, leave to appeal should be granted, but the appeal dismissed.

51. LEEMING JA: I agree with the Chief Justice.

52. ADAMSON J: I agree with the Chief Justice.

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Decision last updated: 23 November 2018