Criminal law - Appeal against sentence - Stealing as a servant - One transaction rule - Whether the total effective sentence infringed the first limb of the totality principle

Sentencing Act 1995 (WA), s 6(1)

Bessell v The Queen (Unreported, WASCA, Library No 980199, 4 March 1998)

Collins v The State of Western Australia [2007] WASCA 108

Davis v The Queen [2002] WASCA 298

Deville v The State of Western Australia [2004] WASCA 264

Dimanopolos v The State of Western Australia [2011] WASCA 62

George v Birtwhistle [2003] WASCA 75

House v The King [1936] HCA 40; (1936) 55 CLR 499

Lowndes v The Queen [1999] HCA 29; (1999) 195 CLR 665

Nelmes v The State of Western Australia [2004] WASCA 191

Pain v Forbes [2000] WASCA 260

R v Jeffree (Unreported, WASCA, Library No 980150, 13 February 1998)

R v Ottobrino [1999] WASCA 207;

R v Wilkinson (1996) 85 A Crim R 353

Roffey v The State of Western Australia [2007] WASCA 246

Smallbone v The State of Western Australia [2008] WASCA 167

Smith v The Queen [2003] WASCA 235

Stephens v The Queen [2004] WASCA 124

SWD v The State of Western Australia [2012] WASCA 76

The State of Western Australia v Bianco [2007] WASCA 197

Wilkie v The State of Western Australia [2005] WASCA 156

Wilson v The State of Western Australia [2010] WASCA 82

3 MAZZA JA: This is an appeal against sentence.

4 On 5 August 2011, the appellant pleaded guilty before Braddock DCJ to seven counts of stealing as a servant contrary to s 378(7) of the Criminal Code (WA), being:

The total amount of money stolen by the appellant was $124,633.67.

5 The appellant was not sentenced immediately. Having heard the appellant's counsel's plea in mitigation, her Honour expressed a concern that she did not have the benefit of pre-sentence and psychological reports: AB 71. She adjourned the sentencing proceedings to enable those reports to be prepared. On 28 September 2011, after considering the contents of the reports and upon hearing further submissions from counsel, her Honour imposed a total effective sentence of 3 years and 4 months' immediate imprisonment with eligibility for parole. Her Honour imposed 12 months' imprisonment on each of counts 1 and 4 and 16 months' imprisonment on counts 2, 3, 5, 6 and 7. She ordered that the sentences on counts 1, 2 and 4 be served cumulatively.

6 Originally the appellant relied on two grounds of appeal. At the hearing, the appellant abandoned ground 1. Ground 2 is in these terms:

The learned sentencing Judge erred in law in arriving at the total effective sentence of 3 years and 4 months imprisonment by failing to properly apply the first limb of the 'totality principle', namely ensuring that the aggregate of the sentences imposed was a just and appropriate measure of

the total criminality involved having regard to all the circumstances of the case, including circumstances personally referable to the Appellant.

7 Leave to appeal was granted in respect of this ground on 28 November 2011.

9 Between July 1994 and October 2007 the appellant, a qualified accountant, was employed as the financial controller in a small business which traded under the name of Westral Sunshades. The company which owned the business, Noilly Pty Ltd, was owned and controlled by Mr Albert Walmsley and his family.

10 Mr Walmsley reposed complete trust in the appellant. Not only was the appellant a trusted employee, but over time he became a trusted friend to the Walmsley family.

11 The appellant's duties enabled him to have unrestricted access to the business' bank accounts. The appellant also had the ability to conduct online transactions in relation to these bank accounts.

12 In order to fund his own share acquisitions, the appellant without Mr Walmsley's knowledge or authority transferred, online, from one of the business' bank accounts to his own bank account, the amounts the subject of the charges. Some of these transfers were falsely recorded in the books as superannuation payments.

13 In October 2009 the appellant's employment was terminated in circumstances in which her Honour found that 'it was probably likely' that the appellant's offending would come to light. The day after the termination, the appellant voluntarily disclosed to Mr Walmsley what he had done. Within a short time after that he repaid all the moneys he had stolen by selling shares he had acquired using the stolen money and by extending the mortgage on his house.

14 Eventually, the appellant's offences were reported to the police.

15 On 3 August 2010 the appellant was interviewed by detectives attached to the Major Fraud Squad. In that interview, the appellant unequivocally admitted his wrongdoing. He assisted the police in their inquiries by going through spreadsheets that set out a large number of transactions and identifying those that were unauthorised.

16 The appellant did not try and excuse what he had done. With some insight, he described himself as having adopted, during the course of his offending, a 'warped rationalisation' that he was entitled to take the money: AB 128. Towards the end of the interview, the appellant said:

[Mr Walmsley] was ... very, very good to my family. ... I've seen [him] a number of times after my employment was terminated and um just the look in his eyes, the hurt in his eyes and how he treated me and I misplaced that trust (AB 148).

17 Some months after the interview, the appellant was charged.

18 At the time he was sentenced the appellant was 45 years of age. He had no prior criminal history. The appellant is a married man with three young children. The appellant had, since graduating from university, a constant record of employment. Character references tendered on his behalf spoke highly of his personal qualities.

19 When the appellant entered his pleas of guilty on 5 August 2011, defence counsel informed her Honour that the reason for the appellant's offending was his 'obsessive' share trading: AB 65. The court-ordered psychological report prepared by Ms Jane Sampson revealed that the appellant had been suffering from undiagnosed depression and that he had coped with this condition by engaging in compulsive behaviours. She observed that the appellant had obsessively gambled when he was at university. Ms Sampson was of the opinion that the investments the appellant made in the stock market were a 'distraction' from his mental health problems.

20 Mr Walmsley provided a victim impact statement. That document speaks eloquently of Mr Walmsley's deep sense of betrayal. He stated that he and his family have been affected emotionally by the appellant's actions. He acknowledged that the moneys that were stolen have been repaid. Nevertheless, he still felt 'deeply hurt and scarred'.

22 Her Honour characterised the appellant's offending as being particularly serious having regard to:

(a) the period of time over which the offences were committed (between 13 and 14 months);

(b) the appellant's standing and position in the business;

(c) her Honour's view that the offending involved what she described as a 'personal breach of trust';

(e) the significant sums of money which were stolen: AB 85.

23 Her Honour took the following mitigating factors into account:

(b) his voluntary confession to Mr Walmsley, albeit in circumstances where it was probably likely to have come to light in due course;

(c) the appellant's genuine remorse which was reflected by the appellant not seeking to make any excuses for his behaviour and by the repayment of the entire amount stolen before the police became involved in the case;

(d) the assistance the appellant gave the investigating officers; and

(e) the appellant's previous good character and antecedents.

24 Her Honour found that the motivation for the appellant's offending was primarily financial, but she accepted that his behaviour was partly caused by 'an element of compulsive behaviour in the background consequent upon undiagnosed and possibly serious depressive illness into which [the appellant] had no insight at the time': AB 88.

25 In light of the serious nature of the appellant's offending, her Honour concluded that the inevitable disposition was one of immediate imprisonment. Her Honour said that but for the mitigating factors, she would have imposed terms of imprisonment on counts 1 and 4 of 18 months and on counts 2, 3, 5, 6 and 7 of 2 years' imprisonment: AB 89.

26 Her Honour expressly referred to the issue of totality, calling it 'the real issue in this case'. Her Honour then proceeded to make the orders for concurrency and cumulacy mentioned earlier in these reasons.

27 There is no challenge to the individual sentences imposed by her Honour.

28 The thrust of the appellant's submissions was that the total effective sentence infringed the first limb of the totality principle. It was submitted that the total effective sentence of 3 years and 4 months' immediate imprisonment was excessive and did not justly or properly reflect the offender's total criminality. The appellant cited a number of comparable cases to support his argument that the total overall sentence imposed by her Honour was excessive. I will refer to some of those cases later in these reasons.

29 The respondent submitted that the appellant was in a position of utmost trust and that he abused the professional and personal trust resided in him in a significant way. Having regard to the seriousness of the appellant's criminal conduct and the need to provide general deterrence, the total effective sentence imposed by her Honour was within a sound discretionary range. Accordingly, this court has no basis to interfere with it.

The principles of appellate review of sentences

30 As the High Court made clear in Lowndes v The Queen [1999] HCA 29; (1999) 195 CLR 665 [15], the discretion which is committed to sentencing judges is of vital importance in the administration of criminal justice. An appellate court cannot interfere with a sentence simply because the appellate court would have exercised its discretion differently from the sentencing judge. An appellate court can only intervene if the appellant demonstrates that the sentencing judge has erred in the exercise of his or her discretion. In a case such as the present, where the alleged error is said to be implied from the result, it is necessary to show that the sentence was so unreasonable or unjust that the appellate court is compelled to the conclusion that a substantial wrong has occurred: House v The King [1936] HCA 40; (1936) 55 CLR 499, 505; Wilson v The State of Western Australia [2010] WASCA 82 [2]; SWD v The State of Western Australia [2012] WASCA 76 [25], [26].

31 The totality principle is well known and its territory well traversed. A concise and accurate statement of the principle was made by McLure JA in Roffey v The State of Western Australia [2007] WASCA 246 [24] - [26]:

The appellant relies on the totality principle which comprises two limbs. The first limb is that the total effective sentence must bear a proper relationship to the overall criminality involved in all the offences, viewed in their entirety and having regard to the circumstances of the case, including those referable to the offender personally: Woods v The Queen (1994) 14 WAR 341.

The second limb is that the court should not impose a 'crushing' sentence. The word crushing in this context connotes the destruction of any reasonable expectation of a useful life after release: Martino v The State of Western Australia [2006] WASCA 78 [16]. An aggregate sentence may be inappropriately long under the first limb even if it cannot be described as crushing: Jarvis v The Queen (1998) 20 WAR 201, 216 (Anderson J).

The practical effect of the totality principle is ordinarily to arrive at an aggregate sentence that is less than that which would be arrived at by simply adding up all the terms appropriate for the individual offences: R v Holder [1983] 3 NSWLR 245, 260 (Street CJ). A rationale for the totality principle is that there is assumed rehabilitation and reduced demand for retribution after the initial sentences have been served. Where the principle of totality comes into effect, it is of little importance how the ultimate aggregate is made up: R v Holder (260)

32 In its terms, the appellant's ground of appeal only alleges a breach of the first limb of the totality principle.

The sentencing principles relating to offences of stealing as a servant

33 Section 378 of the Criminal Code provides for various punishments for the offence of stealing. The general maximum penalty is 7 years' imprisonment. However, in certain special cases set out in s 378(1) to (9), greater maximum terms of imprisonment are provided for. Stealing as a servant is one of those special cases. A person convicted of this offence is liable to a maximum penalty of 10 years' imprisonment: s 378(7) of the Criminal Code. Self-evidently, this offence is a more serious kind of stealing. This is because the offence involves a breach of the trust which exists between employer and employee. Because of this aspect of breach of trust, significant weight must be accorded to general deterrence with an associated reduction in the weight given to personal antecedents. Thus as a matter of fact, ordinarily the appropriate penalty for the offence is the imposition of a term of immediate imprisonment, particularly where the total amount stolen is substantial and involves multiple offences: Dimanopolos v The State of Western Australia [2011] WASCA 62 [19] (McLure P; Buss JA agreeing).

34 The appellant's offending was plainly serious. He was given the utmost trust by his employer and he betrayed it by stealing a substantial sum of money totalling almost $125,000 over a period of approximately 14 months. He did so by manipulating the financial systems of the company which he, as the business's accountant, was duty bound to protect from exploitation. Despite the accepted mitigating factors, the imposition of an immediate term of imprisonment was necessary and the only appropriate disposition to reflect the gravity of the appellant's offending and to provide general deterrence.

35 However, the combined force of the many mitigating factors was particularly powerful. In addition to the commonly seen mitigating factors such as the early pleas of guilty, genuine remorse and good antecedents, the appellant admitted his wrongdoing to his employer, made full restitution of the money he had stolen, cooperated with the police and his offending was, to some extent, caused by an undiagnosed mental condition. These matters, while not sufficient to give rise to the exceptional result of a non-custodial penalty, justified the imposition of a total effective term of imprisonment at the low end of the range of a sound sentencing discretion.

36 It is useful, in order to ensure broad consistency, to view the total effective term of imprisonment imposed upon the appellant in the light of other cases decided in this court with respect to sentences for stealing as a servant. In doing so, it is important to recognise that each case must be decided on its own facts and that no two cases are the same.

37 I have already mentioned Dimanopolos v The State of Western Australia. In that case, the appellant was convicted, after fast-track pleas of guilty, of 175 counts of stealing as a servant. The appellant, while employed as a bookkeeper for a small family-run business, stole $290,711.58 over a period of 6 years and 9 months. The appellant was, at the time of sentencing, 70 years of age. This court refused leave to appeal against the total effective sentence of 2 years' immediate imprisonment imposed at first instance.

38 In The State of Western Australia v Bianco [2007] WASCA 197, the respondent pleaded guilty to 297 counts of stealing as a servant. The total amount stolen was $924,937.16 which was taken over a period of approximately 6 years. The respondent was aged 32 years at the time of sentence. Initially he was sentenced to a total effective sentence of 2 years and 6 months' imprisonment, but the State's appeal against the lenience of that sentence was upheld and the court increased it to 3 years and 6 months' immediate imprisonment. It was noted that but for the double jeopardy considerations which applied at that time, a higher sentence would have been imposed.

39 In Collins v The State of Western Australia [2007] WASCA 108, the appellant pleaded guilty, at the earliest opportunity, to 75 counts of stealing as a servant. The total amount stolen by him was $56,507 over a period of 10 1/2 months. The appellant was sentenced at first instance to a total effective term of 2 years and 6 months' imprisonment. By majority, his appeal against sentence was allowed and the total effective sentence was reduced to 1 year 8 months' imprisonment.

40 In Wilkie v The State of Western Australia [2005] WASCA 156, the appellant was sentenced to a total effective term of 5 years' imprisonment for 102 counts of stealing as a servant in which the total sum of $1,652,768.17 was stolen over a period of 7 years and 9 months. His appeal was dismissed.

41 In Nelmes v The State of Western Australia [2004] WASCA 191, the appellant was sentenced at first instance to a total effective term of 4 years and 8 months' imprisonment for six counts of stealing as a servant and 21 counts of fraud. The total amount stolen or defrauded was $309,671.44 over a period of approximately 3 years. The appellant's appeal was allowed and the total effective sentence reduced to 4 years' imprisonment.

42 In Smith v The Queen [2003] WASCA 235, the appellant was sentenced to a total effective term of 2 1/2 years' imprisonment with eligibility for parole for 22 offences of stealing as a servant involving a total sum of $667,750 which was stolen over a period of approximately 16 months. The appeal against sentence was dismissed.

43 In Smallbone v The State of Western Australia [2008] WASCA 167, Steytler P, from [18] to [29], undertook an analysis of a number of cases involving smaller frauds, including R v Wilkinson (1996) 85 A Crim R 353; Bessell v The Queen (Unreported, WASCA, Library No 980199, 4 March 1998); R v Jeffree (Unreported, WASCA, Library No 980150, 13 February 1998); R v Ottobrino [1999] WASCA 207; Pain v Forbes [2000] WASCA 260; Davis v The Queen [2002] WASCA 298; George v Birtwhistle [2003] WASCA 75; Stephens v The Queen [2004] WASCA 124; Nelmes v The State of Western Australia; Deville v The State of Western Australia [2004] WASCA 264 and Collins v The State of Western Australia. His Honour noted, at [30], that the cases are not entirely consistent, especially when some of the sentences imposed in respect of less serious offences are compared with the sentences imposed for more serious offending.

44 What can be said when the total effective sentence in this case is viewed against the cases I have referred to is that it is without doubt very high and is more consistent with cases which are substantially more serious than this case.

45 With great respect to her Honour, the total effective sentence of 3 years and 4 months' immediate imprisonment was not an appropriate reflection of the appellant's overall criminality, having regard to all of the circumstances of the offending including those referable to the appellant personally. In particular, it does not reflect the combined effect of powerful mitigatory factors to which I have already referred. Implied error has been established and it now falls to this court to exercise the sentencing discretion afresh.

46 In my opinion, having regard to all the circumstances of the case, a total effective sentence of 2 years' immediate imprisonment with eligibility for parole is a sentence which is commensurate with the seriousness of the offence: s 6(1) of the Sentencing Act 1995 (WA). This should be achieved by setting aside her Honour's order for cumulation and substituting it with a new order that the sentences on counts 1 and 4 be served cumulatively.

1. The appeal is allowed.
2. The order made by Braddock DCJ for cumulation is set aside.
3. The sentence of 12 months' imprisonment on count 4 is to be served cumulatively upon the sentence of 12 months' imprisonment imposed on count 1.
4. The total effective sentence to be served by the appellant is 2 years' imprisonment.
5. All other orders made by Braddock DCJ stand, including her orders for eligibility for parole and the commencement date of the sentence.

48 The appellant will be eligible for release on parole in 1 year from 5 August 2011.