Bell v R

Criminal Code (Cth) s 134.1, s 135.1, s 135.4(1) LEGISLATION CITED: Crimes Act 1914 (Cth) s 19AB Transfer of Prisoners Act 1983 (Cth)

Pearce v The Queen (1998) 194 CLR 610 CASES CITED : Postiglione v The Queen (1997) 189 CLR 295 R v Ilbay [2000] NSWCCA 251 R v Pont (2000) 121 A Crim R 302

PARTIES: Peter Douglas Bell Regina

COUNSEL: Mr H Dhanji (Applicant) Mr M Buscombe (Respondent)

SOLICITORS: Bannister Kyriacou Nasser Lawyers (Applicant) Commonwealth Director of Public Prosecutions (Respondent)

LOWER COURT JURISDICTION: District Court

LOWER COURT JUDICIAL OFFICER: Marien SC DCJ

LOWER COURT DATE OF DECISION: 24 August 2007

IN THE COURT OF CRIMINAL APPEAL 2007/3992

McCLELLAN CJ at CL BARR J PRICE J

12 September 2008 Bell v R Judgment 1 McCLELLAN CJ at CL: I agree with Price J. 2 BARR J: I agree with Price J. 3 PRICE J: The applicant Peter Douglas Bell seeks leave to appeal against the severity of the sentence imposed upon him in the District Court of New South Wales on 24 August 2007. 4 On 7 May 2007 the applicant pleaded guilty to an indictment containing one count under s 135.4(1) of the Criminal Code(Cth) which alleged that he and Mark John Williams (Williams): Between about 18 November 2002 and 5 October 2004 at Sydney, New South Wales and elsewhere did conspire with each other with the intention of dishonestly obtaining a gain from the Australian Broadcasting Corporation, a Commonwealth entity. 5 The maximum penalty for the offence is 10 years imprisonment. 6 The applicant was sentenced to imprisonment for 6 years 6 months commencing on 27 July 2007 and expiring on 26 January 2014 with a non-parole period of 3 years 10 months commencing on 27 July 2007 and expiring on 26 May 2011. 7 The Judge had reduced the sentence by 15 per cent for the applicant's willingness to facilitate the course of justice by his plea of guilty. 8 The notice of appeal identifies three grounds: 1. The learned sentencing Judge erred in determining that the criminal culpability of the applicant was comparable to that of Williams. 2. The applicant has a justifiable sense of grievance by virtue of the disparity between the sentence imposed upon him and that imposed upon Williams. 3. The sentence is, in all the circumstances, manifestly excessive. Facts 9 The Crown tendered a statement of facts which the Judge summarised as follows (ROS 2-6): " Between May 2002 to about October 2004 the offender Williams was employed by the ABC as a production manager for news and current affairs programs made for the ABC Asia Pacific Service and the program "Business Breakfast". His duties and responsibilities in that position included the budget accounting process and the approval of certain expenditure. The ABC conducted an audit in around October 2004 following report made by an ABC reporter concerning suspect transactions on his ABC American Express Corporate card. … The internal audit and investigation revealed a series of frauds perpetrated by Williams. The offences commenced approximately one month after Williams started full time employment with the ABC and coincided with the time that he was declared insolvent by the Insolvency and Trustee Service Australia. … Notwithstanding the fact that Williams' wife worked at the ABC, in an ABC employee details form completed or adopted by Williams in late 2001, he listed Bell as his next of kin who should be contacted in case of an emergency. At all material times during the period 2002 to 2004, Bell was the sole director of CFX Pty Limited (CFX) to the extent that CFX conducted any business during that period. The business provided sales and marketing services in respect of computer equipment and software sold by CFX. These products were utilised in the post- production stage of film and television. CFX was not in the business of supplying cameramen, sound recordists, or any other pre-production equipment or services. CFX had no offices, employees or agents other than Bell. Between about November 2002 and October 2004 the offenders agreed to dishonestly obtain money from the ABC by submitting invoices to the ABC in the name of CFX in respect of services purportedly provided to the ABC by CFX, but which services had not been provided. The agreement between the offenders also envisaged that Williams was to authorise the payment of the invoices by the ABC in his capacity as production manager; that the funds obtained from the ABC in payment of the invoices were to be paid, in the first instance, into a bank account or bank accounts operated by Bell, and that Bell was to subsequently pay or transfer a portion of the funds received from the ABC to Williams or a bank account or bank accounts operated by him. Bell was to retain a portion of the funds received from the ABC. ` During the period November 2002 to October 2004 72 invoices in the name of CFX were submitted to the ABC. Each of the CFX invoices was created by Williams. Bell knew that Williams was preparing invoices in the name of CFX and authorised him to do so by providing an electronic copy of a legitimate CFX invoice. Bell also assisted Williams by providing some of the details to be included in the invoices, including the ABN, address and telephone and facsimile numbers of CFX and the details of the bank account into which the ABC was to deposit funds in payment of the invoices. … All of the invoices were for a sum of in the order of $10,000 or less than $10,000, this being the ordinary approval limit for production managers of Williams' seniority at the ABC. None of the money referred to in the CFX invoices was properly payable by the ABC to CFX. Both of the offenders knew that CFX had not performed the work or provided the services referred to in the invoices. Both offenders knew that no moneys were due to CFX from the ABC in respect of any work performed or services rendered during the period November 2002 to October 2004. The offender Bell opened and operated a number of bank accounts on dates specified in the facts. A Bell account No. 2 was opened and operated by Bell specifically to receive funds from the ABC in payment of the CFX invoices and to pay a portion of those funds to Williams. … The offender Williams opened and operated a number of bank accounts and those accounts and the dates they were opened are referred to in the facts. An account opened by the offender Williams being his account No 2 was opened and operated by him specifically to receive funds from Bell that related to the ABC payments. Seventy one of the 72 invoices specified in the schedule to the statement of facts were engrossed by Williams in his capacity as production manager as having been approved for payment by the ABC. Once the invoices were engrossed by Williams as having been approved for payment, Williams caused the invoices to be forwarded to the ABC Accounts Payable Section for payment. Funds in payment of the invoices were subsequently paid by the ABC to the bank account nominated on the invoices or by cheque payable to CFX. A total of $556,039 was paid by ABC to CFX. Following payment the ABC sent remittance advices by mail to CFX at addresses nominated on the invoices. Each of the bank accounts into which funds were received from the ABC in payment of the invoices was operated by Bell. Following receipt of a payment for an invoice, Bell arranged to transfer funds representing a portion of the ABC payment or payments to a bank account nominated by Williams either by cheque or electronic funds transfer by the internet. … The payments made by Bell to Williams represented 55.38% of the total payments made by the ABC to the bank accounts operated by Bell, a total of $307,951. The remaining funds were retained by Bell being a total of $248,088 (44.62%)." 10 Neither the applicant nor Williams has repaid any of the proceeds of the crime.

Subjective Circumstances 11 Evidence of the applicant's subjective circumstances was put before the Judge by way of a report of Mr Tim Watson-Munro, a forensic psychiatrist, and a pre-sentence report. Mr Watson-Munro gave evidence during the proceedings on sentence as did Stephen Patterson and Jonica Jesser who gave character evidence. Written character testimonials were also tendered as was a report from Dr Richard Peppard which concerned the applicant's wife. The applicant did not give evidence. 12 The applicant was born in March 1951 and was 56 years of age at the time of sentence. He has no prior criminal history and had been employed in the IT industry for some 36 years including 21 years as the managing director of his own business which was involved in the production of computer graphics. He owned and managed that business until 2002. From that time, he was employed in various management positions until he established CFX Pty Ltd, a marketing consultancy. 13 The applicant had been married for 25 years. Mrs Bell was diagnosed with cervical dystonia about 11 years ago. Her symptoms include severe involuntary neck turning and extension movements and severe neck tremor. She had handwriting dystonia which creates an on-going difficulty with regard to her employment. Dr Peppard opined that it was very likely that the stress of having her husband incarcerated interstate would significantly contribute to the risk of her neck dystonia and worsening of the on going dystonia in her arm.

14 The Judge referred in his remarks on sentence at page 19 to the evidence of Mr Watson-Munro as follows: " Tendered on behalf of the offender is the report of Consultant Forensic Psychologist, Tim Watson-Munro, dated 20 June 2007. Mr Watson-Munro was also called to give evidence. He is of the opinion that the offender is clearly suffering substantial symptoms of depression, anxiety and other indicia of an adjustment disorder. He states that it is apparent that his depression and anxiety, in part, relate to his current circumstances, although he says he suspects in addition, in the context of his general history, the offender has been significantly depressed and anxious for many years. Mr Watson-Munro does not state, however, that those conditions have prevented the offender from maintaining employment in the past. He states that the offender has been exposed to a number of stresses for more than 10 years and that they include his wife's serious neurological illness, coupled to continuing financial problems as a consequence of a decline in his business turnover in the IT industry. Mr Watson-Munro said that he visited the offender and his wife at their home and he notes that he was informed that the home is currently mortgaged to an amount of $300,000 and that there is a very real prospect that they will lose the home on the offender's imprisonment. Mr Watson-Munro states that the offender will require close supervision and ongoing treatment upon sentence. He says the offender has expressed considerable regret for his behaviour." Dealing with the appeal 15 There are three grounds of appeal. The first asserts that the Judge erred in determining that the applicant's criminal culpability was comparable to that of the co-offender Williams. The Court's attention was directed to the following passages in his Honour's sentencing remarks (at 9): " In relation to Bell, although there was no direct breach of trust on his part, it is still highly relevant in assessing his criminality that he well knew that it was essential to the conspiracy's success that Williams would consistently, repeatedly and systematically deceive his employer, in breach of the very high trust which had been placed in him." 16 His Honour said (ROS at 28): "In my view, with respect to the conspiracy offence, the criminal culpability of both offenders is comparable, although there was no direct breach of trust by Mr Bell. As I have said he knew very well that the conspiracy involved a gross breach of trust on the part of Williams and he knew the total amount of the fraud that was perpetrated. He knew that the breach of trust by Williams was crucial to the success of their criminal venture." 17 It was conceded that the Judge differentiated between the applicant and the co-offender when he went on to say (ROS at 28): " However, I have taken into account that Mr Williams did derive a greater financial benefit directly from the scheme and I have determined that the sentence to be imposed upon him should be somewhat longer than the sentence imposed upon Mr Bell for the conspiracy offence." 18 Mr Dhanji for the applicant submitted that the distinction which was made should not have been confined to the greater proportion of the proceeds of the crime that the co-offender received. Counsel contended that Williams had been employed by the ABC and had breached the trust placed in him as a result of that employment whereas the applicant was not in the same position. He had not breached any trust. Whilst the applicant was necessarily aware that Williams was abusing his position, this was not the same as abusing an employer's trust directly. The breach of trust by Williams was a factor of aggravation, which was not present in the circumstances of the applicant's offending. The Court's attention was drawn to what has been said in cases such a R v Pont (2000) 121 A Crim R 302 at 311-312 that sentences imposed for offences of serious breaches of trust will necessarily involve general deterrence. It was next submitted that Williams was the prime mover in the enterprise whereas the applicant's role was essentially limited to remitting to Williams a portion of the funds that Williams had fraudulently obtained. 19 Criminal conduct by an employee involving a serious breach of trust will necessarily attract a deterrent sentence because of the obligation to uphold the trust of an employer and the difficulty often experienced in the detection of such a crime. It is, to my mind, difficult to distinguish the criminal culpability of an employee who persistently and seriously breaches his employer's trust from the criminal culpability of an offender who participates in the crime with the knowledge that the breach of trust by the co-offender is fundamental to its success. Any basis for such a distinction is further diminished when the participation by the offender is essential to the employee's breach of trust not being detected. 20 In the present case, the Judge acknowledged that there had not been a "direct" breach of trust by the applicant. His Honour found that he knew that it was essential to the success of the conspiracy that Williams would "consistently, repeatedly and systematically" deceive his employer in breach of his employer's trust. 21 The applicant's participation in the criminal enterprise was fundamental to its lack of detection and success over almost two years. His activity included the provision of an electronic copy of a legitimate CFX invoice to Williams and some of the details to be included in the invoices. Seventy two false CFX invoices were engrossed by Williams as having been approved for payment and were forwarded to the ABC accounts section for payment. The applicant opened a bank account to receive the payments from the ABC which amounted to a total of $556,039. The monies that he retained totalled $248,088. His role was not confined to remitting the funds to Williams. 22 No error has been established in his Honour's determination that the applicant's culpability was comparable to that of Williams. Ground one of the appeal fails. 23 The second ground of appeal is that the applicant has a justifiable sense of grievance by virtue of the disparity between the sentence imposed on him and that imposed on Williams. 24 Williams was sentenced at the same time as the applicant for the offence of conspiracy contrary to s 135.4(1) of the Criminal Code(Cth) and for five additional offences, namely three counts of dishonestly obtaining a gain under s 135.1 of the Criminal Code(Cth) and two offences of obtaining property by deception contrary to s 134.1 of the Criminal Code (Cth). An offence contrary to s 134.1 is punishable by 10 years imprisonment whereas an offence contrary to s 135.1 is punishable by 5 years imprisonment. 25 The offences contrary to s 135.1 involved the dishonest use by Williams of an ABC Visa card, an ABC American Express card and Cabcharge vouchers. The total amount that Williams gained from the ABC by the use of these cards was $35,473. For these offences, his Honour imposed concurrent sentences of 18 months imprisonment to commence on 27 July 2007 and to expire on 26 January 2009. 26 The offences contrary to s134.1 involved false staff reimbursement claims and petty cash claims by Williams totalling $18,860. For these offences concurrent sentences of 2 years imprisonment were imposed to be served at the same time as the sentences for the s 135.1 offences. 27 For the offence of conspiracy, the Judge sentenced Williams to 7 years imprisonment to commence on 27 July 2008 and to expire on 26 July 2015. A single non-parole period of 4 years 9 months expiring on 26 April 2012 was set. The total effective sentence was 8 years imprisonment with a non-parole period of 4 years 9 months. The sentence had been reduced by the Judge by 15 per cent for Williams' willingness to facilitate the course of justice by his plea of guilty. 28 It was contended by Mr Dhanji that there were, apart from the argument advanced in respect of Ground 1, other factors which distinguished the applicant from his co-offender and called for a significantly lower sentence to be imposed than that on Williams. Matters identified were the applicant's mental state at the time of, and subsequent to the commission of the offence, that the circumstances of his incarceration were likely to be more onerous than would ordinarily be the case and that this was his first criminal conduct. Mr Dhanji submitted that the impact of the applicant's mental condition to some extent explained how he became involved in this, his first, criminal offence at such a late stage in his life. 29 In his report Mr Watson-Munro expressed the opinion that the applicant had suffered a significant adjustment disorder according to DSM-IV criteria for many years. His symptoms had included variable and at times intense depression, debilitating anxiety and substantial loss of his self-esteem. The Court was referred by Mr Dhanji to the following passage in the report: "It is clear that he is extremely well bonded with his wife and in this context her medical condition no doubt has had a profound impact upon this man's capacity to cope over the years. This is of some relevance to the current matters before the Court, in the setting of the impact that his mood state has had upon his judgment at the material time and from that time onwards." 30 During the proceedings on sentence, Mr Watson-Munro was questioned by the Crown (POS at 37): [Crown] Q. Up the top, the first three lines, you tell us that in your view, has told you a complex clinical history which has been compounded by his wife's longstanding neurological illness which clearly has had a dramatic impact upon his judgment. In what way, in terms of his judgment? [Mr Watson-Munro] A. In the context of anxiety and depression tending to interfere with objectivity. I wouldn't put it any higher than that. [Crown] Q. You weren't seeking to suggest that it was in some way responsible for the dishonest conduct at the heart of the offence to which he's pleaded guilty? [Mr Watson-Munro] A. No." (italics added)

31 It is evident from what was said by Mr Watson-Munro that he was of the opinion that the applicant's mental condition did not impact on his culpability for the crime. The Judge was entitled to give little weight to the applicant's mental condition as a factor which distinguished him from Williams. 32 The Judge, in my opinion, correctly found that "with respect to both offenders that the principal motivating factor in the commission of these offences was sheer, unadulterated greed."

33 His Honour carefully considered the applicant's submission during the proceedings on sentence that there should be some reduction in his sentence because of his wife's physical condition which the Judge rejected. So far as the difficulties which might be experienced from his incarceration in New South Wales, the Judge noted that there was provision for his possible transfer from this State to Victoria under the Transfer of Prisoners Act 1983 (Cth). I do not detect any error in his Honour's approach. 34 The principal circumstances of difference between the applicant and his co-offender were the amounts of money each had retained from the conspiracy and the five additional offences with which Williams was charged. These additional charges added to the difficulty of the Judge's sentencing task. His Honour was obliged to have regard to the totality of the sentence to be imposed on Williams as well as to the question of parity between the co-offenders on the offence of conspiracy. In sentencing Williams, the Judge expressly referred to the principles of totality in Pearce v The Queen (1998) 194 CLR 610 and determined an appropriate sentence for each offence, then considered questions of cumulation or concurrence as well as totality. The sentence for the offence of conspiracy was fixed so as to commence one year after the commencement of the sentences for the s 134.1 and s 135.1 offences. The sentences for the s 134.1 offences were concurrent fixed terms of 2 years. A single non-parole period was set as was required by s 19AB of the Crimes Act 1914 (Cth). 35 Mr Dhanji submitted that as a consequence of the manner in which the sentences were structured, Williams' sentence for the conspiracy was in effect 6 years with a non-parole period of 2 years 9 months whereas the applicant's sentence for the same offence was 6 years 6 months with a non-parole period of 3 years 10 months.

36 The Crown submitted that this approach overlooked the fact that in sentencing Williams, his Honour was required to observe the principles of totality and accumulation and that s 19AB of the Crimes Act(Cth) required the Judge to fix a single non-parole period in respect of all sentences. When those matters are taken into account, the Crown argued, the applicant's analysis loses its force. 37 The application of the principle of totality does not render considerations of parity redundant. 38 In Postiglione v The Queen (1997) 189 CLR 295 Dawson and Gaudron JJ said (at 301-2, 303): "Discrepancy or disparity is not simply a question of the imposition of different sentences for the same offence. Rather, it is a question of due proportion between those sentences, that being a matter to be determined having regard to the different circumstances of the co-offenders in question and their different degrees of criminality…" "The approach adopted by the Court of Criminal Appeal in this case treats or has the effect of treating the total period to be served in custody and, more particularly, the actual period to be served in consequence of the offences committed as irrelevant to the proportion which the sentences imposed on Postiglione and Savvas should bear to each other. In the circumstances of this case, the real punishment for both Savvas and Postiglione is the extra period which they must spend in prison. Due proportion cannot be determined without taking it into account." 39 Kirby J said (343): "The parity principle between co-offenders continues to operate as a consideration in sentencing notwithstanding the application of the totality principle to one offender." 40 The benefit that Williams received by the application of the totality principle was for the offence of conspiracy an effective non-parole period of 2 years 9 months and an effective head sentence of 6 years. This arises from the partial accumulation of the sentence for the conspiracy upon the fixed terms of imprisonment of 2 years which were imposed for the s 134.1 offences. The non-parole period for the applicant for the conspiracy is 3 years 10 months and the head sentence is 6 years 6 months. The different circumstances of the applicant, namely the smaller financial gain and lack of additional offending in the normal course requires that he receive a lesser sentence than that imposed upon Williams for the same offence. The additional non-parole period of 1 year 1 month and additional head sentence of 6 months gives rise, in my view, to a marked disproportion between the applicant's sentence and the sentence imposed on his co-offender. This conclusion has not been reached by merely adopting a mathematical approach to the sentencing exercise. Equal justice requires that the applicant for the offence of conspiracy should spend less time in prison than Williams. 41 It seems to me that a reasonable person looking at the circumstances of this case would regard the applicant's grievance as justified: R v Ilbay [2000] NSWCCA 251. This Court should intervene and reduce the applicant's sentence notwithstanding that the sentence imposed upon him by the Judge was otherwise appropriate and within the permissible sentencing range, a topic which will be considered under the next ground of appeal. 42 Ground 2 of the appeal is established. 43 The third ground of appeal asserts that the sentence was manifestly excessive. The undiscounted starting point of the sentence was 7 years 8 months which was said to be a very heavy sentence when the maximum penalty of 10 years was considered. 44 This was a very serious offence. His Honour accurately summarised the applicant's criminality when he said (ROS at 27): " He, like Mr Williams, was deeply entrenched in this fraudulent enterprise over a period of almost two years, an enterprise which he knew was defrauding tax payers of some $550,000 and a scheme from which he personally fraudulently benefited to the sum of almost $250,000." 45 A number of sentences imposed in other cases have been referred to by the parties. None of the cases referred to persuade me that the sentence in this case was manifestly excessive. The undiscounted starting point of the sentence does not manifest error and the sentence was within the upper end of an appropriate range. 46 Ground 3 of the appeal has not been established. 47 Error having been identified, I am of the opinion that some other sentence is warranted in law and should be passed. 48 In an affidavit sworn 13 August 2008 the applicant states that on or about 30 March 2008 he lodged an application for interstate transfer from New South Wales to Victoria on welfare grounds under the Transfer of Prisoners Act (Cth). At the time of the swearing of the affidavit, the applicant had not received a reply to his transfer request. It appears that the application will be considered when this appeal is finalised. 49 It is important to recognise that this Court will not intervene to produce a sentence which is totally inappropriate to the criminality involved. I consider that the unjustifiable disproportion between the sentences may be removed by a reduction of 1 year in the applicant's head sentence and 7 months in the non-parole period. Any greater reduction would produce a result which is inappropriate to the objective and subjective criminality involved in the offence. 50 The orders I propose are: (i) Leave to appeal be granted. (ii) Quash the sentence imposed in the District Court. (iii) Sentence the applicant to imprisonment for 5 years 6 months to commence on 27 July 2007 and to expire on 26 January 2013 with a non-parole period of 3 years 3 months to commence on 27 July 2007 and to expire on 26 October 2010. The earliest date on which the applicant will be eligible for release to parole is 26 October 2010. **********

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