DPP v Bourozikas [2009] VSCA 29

Court of Appeal (Vic)|2009-03-03|Before: VINCENT and NETTLE JJA and VICKERY AJA

Criminal law - Sentence - Deficiencies in trust account and theft - Whether total effective sentence of 18 months' imprisonment of which 12 months were suspended was manifestly inadequate - Solicitor - Sole practitioner - Plea of guilty at first opportunity - Restitution made - Young son with medical condition - Effects of sentencing on family - Appeal dismissed.

Mr S Ward, Acting Solicitor for Public Prosecutions

1 This is a Crown appeal against a total effective sentence of 18 months' imprisonment (of which 12 months were suspended) imposed on the respondent on pleading guilty to one count of without reasonable excuse having a deficiency of $100,000 in his trust account (Count 1 on Presentment X00942529 ('the first presentment'), two counts of theft of $50,000 each (Counts 2 and 3 on the first presentment) and one count of theft of $43,170.79 (the sole count on Presentment X01811787 ('the second presentment')).

2 The facts of the matter appear in the judge's sentencing remarks. At relevant times, the respondent carried on practice as a solicitor under the name or style of George Bourozikas, Solicitor, from premises at 384 Haughton Road, Clayton. While so practising, he acted for the executor of the Estate of Lorraine Brooks, deceased and for that purpose established a trust ledger card in the name of the estate for distribution of funds to the beneficiaries, Joy Lau and Raymond Brooks.

3 On 9 May 2006, he wrote two trust account cheques of $50,000 each, payable to himself, and deposited them into his personal cheque account for the payment of personal expenses (Counts 2 and 3 on the first presentment). That created the deficiency of $100,000 in the trust account which is the subject of Count 1 on the first presentment. He then attempted to conceal the deficiency by creating false entries in the trust ledger, cash payments journal, and cheque book stubs, and by placing on the estate's file two unsigned letters addressed to the beneficiaries each purporting to enclose a cheque for $50,000 by way of distribution from the estate.

4 The defalcation was exposed as part of a routine audit. Once the facts were ascertained, the respondent surrendered his practising certificate and, after the Law Institute had appointment a receiver, the practice was sold.

5 On 22 February 2008 the respondent was interviewed by officers of the Fraud Squad and admitted what he had done. He said that he had done it because he had been under financial pressure and that he had spent all but $28,000 of the money paying off credit card debt, his daughter's early-learning centre school fees, other everyday expenses and a holiday to Greece. He frankly acknowledged that he had acted dishonestly and that there was no excuse for what he had done: 'I was just a stupid idiot'. But he added that it was his intention to pay the money back when he could. In a subsequent letter to the Fraud Squad dated 10 March 2008, he advised that he would accept service of the hand-up brief and that he intended to plead guilty.

6 Before the respondent ceased to practise, he acted for a Mr and Mrs Richard Green on the sale under a terms contract of sale of their property in Pakenham. The Greens were in the process of emigrating to the United States but left open an account with the Commonwealth Bank so that purchase price instalments could be banked as they came in. They also made the respondent a signatory to the account, in effect so that he could attend to payments out of the account in accordance with their instructions. For one reason or another, he remained a signatory after his practice was sold.

7 At the time of being interviewed about the $100,000 deficiency in his trust account, the respondent told police, truthfully, that he was under severe financial pressure. He did not say so to them at the time, but the fact was that he had also received a bankruptcy notice from the Australian Taxation Office due his to failure to pay a superannuation contributions surcharge assessment in an amount of approximately $48,000, and he had less than 21 days in which to pay it or face the prospect of bankruptcy.

8 One week later, on 17 March 2008, he withdrew $43,170.79 from the Greens' account with the Commonwealth Bank and purchased with it a Commonwealth Bank of Australia bank cheque made payable to the Australian Taxation Office. The respondent did not have the Greens' permission to do what he did and in fact his authority to operate the account had been revoked. But the Commonwealth mistakenly overlooked the revocation of authority and acted on his instructions. Those were the facts which comprised the sole count on the second presentment.

9 Once Mr Green became aware that the money was missing from his account, and that it had been paid out at the respondent's request, he spoke by telephone to the respondent who told him he had taken it because he needed the money as an emergency and that he would pay it back, initially by an instalment of $2,500 on 7 April and a further payment of $10,000 on 11 April 2008. The respondent gave a personal cheque for the first payment of $2,500, but it was dishonoured on presentation, and he did not make any subsequent payments.

10 On 7 April 2008 the police were notified of what had occurred and on 9 April 2008 they interviewed the respondent again. On that occasion, he admitted that he had taken the $43,170.79 from the account to pay the surcharge assessment. But he told the police, falsely, that he had first sought and obtained Mr Green's permission to do so. Because the Commonwealth Bank had made a mistake in paying out on the respondent's instructions, it later reimbursed the Greens the full amount of their loss.

11 At the time of sentencing, the respondent had made full restitution of the $100,000 taken from his trust account, but not of the moneys taken from the Greens' account. We were told by counsel for the respondent that the respondent has since made full restitution to the Commonwealth Bank of the amount which it paid out.

12 In her sentencing remarks, the judge noted that the respondent had one prior conviction for forgery in 1991, which had also arisen out of the respondent's practice as a solicitor. On that occasion he had been approached by persons in the Greek community wishing to adopt a child privately, and in order to assist them he had witnessed and made a false declaration as to the paternity of that child. He was convicted and fined $2,000 and, in disciplinary proceedings brought by the Law Institute, his practising certificate was cancelled for 12 months.

13 The judge dealt at some length with the respondent's personal circumstances.

14 The respondent's parents came to Australia from Greece in 1956 and in their early years in this country operated a fish and chip shop in Clayton. His father later worked in real estate and lived until he was 82 years of age. His mother was still alive at the time of sentencing but had not been informed of the offences.

15 The respondent was born on 15 October 1958 and had one sister who was his only sibling. He was educated at Clayton North Primary School and later at Monash High School, where he was an above-average student, and then at Monash University from which he graduated in law in 1981. While at university, he established the Clayton Greek Youth Club and he was its president and secretary.

16 After articles with a small firm in Clayton, and two further years as an employee solicitor, in 1984 he established the practice at 384 Haughton Road, Clayton, and he remained there in practice until the practice was sold by the receiver early in 2007. Between 1984 and 1988 he was also club secretary of the Clarinda Soccer Club and at various times he acted as honorary legal adviser to that club and to other associations within the Greek community. After the sale of his practice, he was employed for 12 months as a leasing officer with United Petroleum but since then he had been unable to find employment.

17 At the time of sentencing he was 50 years of age, married, and the father of two children, one of whom, a son aged 13, suffers from a seriously debilitating condition known as Global Developmental Delay Syndrome. The respondent was, however, supported in his predicament by his wife and her parents, who had generously repaid the $100,000 owed to the estate of Mrs Brooks, and proposed to make restitution on the respondent's behalf to the Commonwealth Bank of Australia (and, as we were informed, they have since paid the full amount to the bank).

18 The judge heard character evidence from a number of witnesses who variously spoke of the respondent's standing in the local community. In substance, they said that they regarded him as being a leader in the community who was generous, well liked, loyal, community minded and an enthusiastic and supportive parent.

19 The respondent's wife also gave evidence on his behalf. She spoke of the long hours that he had had to work in his practice and the difficulties of caring for her son, with which the respondent had assisted considerably, and she explained that the problems of caring for their son would be greatly exacerbated if the respondent were gaoled.

20 The judge received a report dated 29 October 2008 from the forensic psychologist, Mr Jeffrey Cummins. His diagnosis was that the respondent had been suffering at the time of offending from an adjustment disorder with depressed mood in the context of work-related burnout, and said that the respondent still presented as being significantly depressed, embarrassed, ashamed, and remorseful. In Mr Cummins' opinion, the respondent's offending conduct represented a self-destructive cry for help against a background of inability to cope adequately in a psychological sense with work-related stress and pressures.

21 The judge also received a report dated 12 October 2008 from the consultant psychiatrist, Dr Dennis Handrinos. He reported that he had seen the respondent on 12 occasions since April 2007; that the respondent's initial presentation had been 'flat and depressed, soon after being caught out on legal trust matters'; and that he considered that the respondent was suffering an adjustment disorder and needed an opportunity for general support and ventilation of his concerns.

22 The judge, however, was not satisfied that the respondent's psychological condition attracted the principles adumbrated in Verdins,[1] either in terms of a reduction in moral culpability or any amelioration of the need for general or specific deterrence. Rather, as her Honour found, the genesis of the respondent's offending was that he had struggled to maintain the appearance of a successful solicitor when in reality he was working long hours without attaining financial success. It also appeared that the pressures of his working life were compounded by the early retirement of his conveyancing clerk, upon whom he had placed great reliance, and by his son's condition. But the fact remained, as the judge observed, that the respondent had stolen the $100,000 to fund a lifestyle to which he aspired but could not afford, including the trip to Greece, a family holiday to Bali and fees for his daughter to attend pre-school; and, although the $43,170.79 stolen from the Greens had gone to pay the Australian Taxation Office in order to avoid bankruptcy, the need to do so had come about because the respondent was living beyond his means.

23 Finally, on this aspect of the matter, the judge noted the contents of various reports concerning the condition of the respondent's son. He had been diagnosed with ongoing development delay, ataxia, and ocular motor apraxia, which is a condition of the eyes. He required weekly speech and occupational therapy and the assistance of a full time integration aide at his present school. His full IQ was only 73, which placed him within the borderline range of intellectual functioning and, as the judge observed, his full-time care would fall to his mother for so long as the respondent was in gaol.

24 Senior counsel for the Director of Public Prosecutions submitted that, although the judge made mention of the need for general and specific deterrence, her Honour had in fact imposed individual sentences which failed to reflect the gravity of the offences and a very limited degree of cumulation which failed to equate to the level of total criminality.

25 In our view there is some force in that submission. The maximum sentence for theft is 10 years' imprisonment[2] and the maximum sentence for a deficiency in a trust account is 15 years' imprisonment.[3] The higher penalty for the latter offence reflects the very serious nature of fraudulent breach of a solicitor's trust account obligations.[4] As Young, CJ explained in Director of Public Prosecutions v Ryan,[5] offences which demonstrate that a solicitor is not to be trusted bring the whole profession into disrepute and, therefore, a solicitor who is guilty of such offences must be punished severely. The sentences to be imposed in such cases, therefore, must be such as not only to reflect the nature and gravity of the offending but also to make plain the court's abhorrence and denunciation of the nature of the offending and to provide general deterrence against the possibility of its repetition.[6]

26 Tested according to those principles, we consider that the sentence of only six months' imprisonment on the count of having a $100,000 deficiency in the trust account was manifestly inadequate to reflect the nature and gravity of the offending. It also seems to us that the sentences of only nine months imposed on the counts of theft of $50,000 fell well short of what was required. There is a further problem, too, that the judge appears to have approached the sentencing task on the basis that the counts of theft were more serious than the count of having a deficiency in the trust account, whereas the latter was the most serious offence of those charged. On the other hand, because the two counts of theft of $50,000 were in effect wholly subsumed in the offence of trust account deficiency, it would not have been inappropriate to order that the sentences imposed on those be served concurrently with the sentence imposed on the trust account deficiency.[7]

27 The sentence of 18 months' imprisonment imposed in respect of the theft of $43,170.79 is also problematic. Arguably, it was within (even if at the limit of) the judge's discretion to show mercy in the circumstances of the case.[8] But in our view it was remarkably merciful, as too was the cumulation of only three months of it on the sentences imposed on the other counts.

28 Other things being equal, therefore, we should be inclined to think that the sentencing errors made in respect of the trust account deficiency of $100,000 and the thefts of $50,000, and the very lenient sentence imposed in respect of the theft of $43,170.79, reveal error of principle which should be corrected as part of the maintenance of sentencing standards.[9]

29 That said, however, there are three considerations in the particular circumstances of this case which lead us to conclude that we should desist from appellate intervention in the exercise of discretion.

30 First, as counsel for the respondent pointed out, the submissions made by the prosecutor on the plea were to the effect that it would be within the range to impose a partially suspended sentence. Since a sentence cannot be wholly or partially suspended unless it is of no more than three years' duration, it was necessarily implicit in the prosecutor's submission that it was within the range to impose a head sentence of no more than three years. The Director of Public Prosecutions should not ordinarily be heard to go back on a concession of that kind once sentence has been imposed.

31 Secondly, because of the application of the principle of double jeopardy as it applies in Crown Appeals against sentence,[10] the extent to which it would be open to increase the sentence in this case would be restricted and, although the resultant increase in this case would not be insignificant, we are not persuaded of the social utility of requiring the respondent to serve it.[11]

32 Thirdly, the respondent has now served all but three months' of the immediate term of imprisonment and, as was observed in Dalley,[12] the Court has always been hesitant in the case of a Director's appeal to return to custody an individual who has already been released from custody, either on parole or in the case of a partially suspended sentence, or to extend an immediate term of imprisonment where little of it remains. In this case, the state of ill-health of the respondent's son and the need for the respondent to care for him, although not amounting to exceptional circumstances of hardship,[13] adds to our hesitation.

[1] R v Verdins & Ors [2007] VSCA 102; (2007) 16 VR 269.

[4] R v Bernstein [2008] VSC 254.

[5] Full Court (Unreported 7 April 1986, 6, Young CJ, Kaye and Tadgell JJ).

[6] R v Krizmanic (CA) [1995] VSC 185 [19] (Callaway JA); R v Kesik [2006] VSC 429 [39] (Coldrey J).

[7] Pearce v The Queen (1998) 194 CLR 610, 623.

[8] R v Osenkowski (1982) 30 SASR 212, 212-213; DPP v Leach [2003] VSCA 96; (2003) 139 A Crim R 64, [48].

[9] R v Clarke [1996] VICSC 30; (1996) 2 VR 520, 522.

[10] R v Allpass (1993) 72 A Crim R 561, 562-3; DPP v Scott [2003] VSCA 25; (2003) 6 VR 217, 222 [18].

[11] R v Boxtel [1994] 2 VR 94, 104-105; DPP v Bright [2006] VSCA 147; (2006) 163 A Crim R 538,[10].

[12] DPP v Dalley [2008] VSCA 173 [17].

[13] See, for example, R v Boyle (1987) 34 A Crim R 202; R v Yates (1998) 99 A Crim R 483, 486-7 (Charles JA), R v Carmody (1998) 100 A Crim R 41, 45 (Tadgell JA), R v Maslen (1995) 79 A Crim R 199, 209 (Hunt CJ at CL) and R v Holland [2002] VSCA 118; (2002) 134 A Crim R 451, 452 (Batt JA) 454 (Eames JA) and 457 (O' Bryan AJA); R v Edwards (1996) 90 A Crim R 510, 515 (Gleeson, CJ).

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