Finnigan v R

Court of Criminal Appeal (NSW)|2013-08-02|Before: Macfarlan JA, Campbell J, Barr AJ, Finnane J, Chesterman JA, Weinberg JA, MacFarlan JA

Judgment 1MACFARLAN JA: I agree with Campbell J. 2CAMPBELL J: In R. v. Lovell [2012] QCA 43 Chesterman JA (at [30]) defined a Ponzi scheme in the following terms: ... a fraudulent investment operation that pays returns to investors from their own money or money paid into the scheme by subsequent investors rather than from any actual profit earned from money invested. The scheme entices new investors by offering returns legitimate investments cannot, returns that were both abnormally high and consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever increasing flow of money from subsequent investors to keep the scheme going. (See also Fasciale v. The Queen [2010] VSCA 337; 207 A Crim. R 488 at 498[52] per Weinberg JA.) 3In one sense, as submitted by learned counsel for the Crown, a Ponzi scheme consists of "robbing Peter to pay Paul". But there must be an endless, serial recruitment of Peters, each of whom, if he or she knew the truth, could hope for no better than to take a turn as Paul because the "entitlements" of previous investors must be paid out with the receipts obtained from the new. There is no investment. 4The ongoing promotion of a Ponzi scheme neatly fits with the concept of engagement upon "one multi-faceted course of criminal conduct": Attorney-General v. Tichy (1982) 30 SASR 84 at 92 - 3 per Wells J; Johnson v. The Queen [2004] HCA 15; 78 ALJR 616 at 618 [4] - [5] per Gleeson CJ. The promotion of a Ponzi scheme also is aptly described as "multiple counts of systematic and serious fraud": Hoy v. The Queen [2012] VSCA 49 at [25] per Nettle JA; or as "an on going fraudulent course of conduct", and "a single fraudulent enterprise": Hoy at [17] per Redlich JA. 5I have referred to these matters at the outset because they have particular relevance to the disposition of the current application for leave to appeal against sentence brought under s.5(1)(c) Criminal Appeal Act 1912 (NSW). 6The applicant was the promoter of a Ponzi scheme who was charged with nine counts of knowingly engaging in dishonest conduct in relation to financial services contrary to s.1041G Corporations Act 2001 (Cth). 7Section 1041G is in the following terms: A person must not, in the course of carrying on a financial services business in this jurisdiction, engage in dishonest conduct in relation to a financial product or financial service. By s.1311(1) non compliance with this provision is an offence. At the relevant time it carried a maximum penalty for an individual of imprisonment for five years: s.1311, and Sch. 3 item 310 Corporations Act. Penalties have been stiffened since then. By amendment made by Act No. 131 of 2010, the maximum penalty for an individual is now imprisonment for ten years. 8The nine individual offences with which the applicant was charged occurred between January 2003 and April 2007, involving a total of $1.96 million in actual financial losses suffered by his investor victims. 9The nine counts had eight victims, all of whom were individuals who fell into that category sometimes described as "mum and dad investors". A plea of guilty was entered upon arraignment in the District Court, which followed a fully contested committal. The sentencing judge allowed a ten per cent discount for the relatively late plea. There is no complaint about this allowance. His Honour passed the following individual sentences: Count 1 - Sentenced to 5 years imprisonment but reduced by 10% for guilty plea to 4 years 6 months imprisonment to commence on 16.12.2011 and to expire on 21.7.2016. Count 2 - Sentenced to 3 years 7 months imprisonment to commence on 16.12.2012 and to expire on 21.7.2016. Count 3 - Sentenced to 3 years 7 months imprisonment to commence on 16.12.2013 and to expire on 21.7.2017. Count 4 - Sentenced to 3 years 7 months imprisonment to commence on 16.12.2014 and to expire on 21.7.2018 Count 5 - Sentenced to 3 years 7 months imprisonment to commence on 16.12.2015 and to expire on 21.7.2019. Count 6 - Sentenced to 3 years 7 months imprisonment to commence on 16.12.2016 and to expire on 21.7.2020. Counts 7-9 - Sentenced to 4 years imprisonment, to be served concurrently to commence on 16.12.2017 and to expire on 15.12.2021. Effectively the sentence amounts to a head sentence of ten years with a six-year non-parole period (See s.19AB Crimes Act 1914 (Cth) ("Crimes Act")). The applicant is eligible for release on parole after 15 December 2017.

Background facts 10The circumstances of the offending were the subject of evidence at the sentencing hearing. The following summary is taken from the Crown submissions in this Court: (a)the conduct occurred between January 2003 and April 2007; (b)the applicant attracted potential investors by befriending them, wining and dining them, gaining their trust and promising high rates of return; (c)his conduct comprised the making of representations designed to induce potential investors to invest their money with the applicant and his companies on the promise of large returns. Those representations included: (i)representations that the applicant had expertise as a financial planner and investment advisor; (ii)representations about the applicant's personal wealth and the financial success of Financial Partners Pty Ltd and other companies controlled by the applicant; (iii)representations about the ability to return 15% per annum on investment funds by investing in property, shares, derivatives and other financial products; (iv)representations to the effect that the applicant could personally guarantee the sum invested; (v)representations to the effect that there was no risk involved in the investment; and (vi)representations to the effect that the investor would receive a monthly interest payment on their investment equivalent to 15% per annum; (d)each of these representations was false and known by the applicant to be false at the times he made those representations to the investors; (e)the conduct involved the creation and use of documents which he provided to investors, which intentionally gave the misleading appearance that their funds would be securely invested; (f)the applicant did not invest these moneys on behalf of the investors in accordance with his representations, but rather used the moneys to fund interest payments to other investors, capital repayments to other investors, various businesses operated by him and to meet the applicant's personal expenses; (g)the total amount of investor capital the subject of the counts in the indictment so treated by the applicant totalled $1,960,000 most of which was never recovered by the investors. The circumstances of the offences were set out in greater particularity in the agreed statement of facts tendered before the learned sentencing judge [AB 82 -134]. The applicant did not give evidence in the sentence proceedings but did not take issue with the contents of the agreed statement of facts [AB 10.35]. 11I have adopted the summary relating to each count from the submissions filed on behalf of the applicant as well as the summary provided by counsel for the applicant of his client's subjective circumstances. The applicant was a director of two companies, Financial Partners Pty Ltd ('FP') and Venture Capital Management Pty Ltd ('VCM'). He and an associate conducted seminars providing investment advice. Neither the applicant nor his companies held an Australian Financial Services Licence. The applicant defrauded a number of investors in a 'Ponzi' scheme. The circumstances of each offence are summarised below. Count 1 Manuela Matt met the applicant in 2003. The applicant claimed he was a financial advisor. He said he had a large company with offices across Australia and he made investors large sums of money without risk. He told Mrs Matt the return from her superannuation fund was poor. Mrs Matt entered into an investment security contract with FP relating to an investment of $200,000 promising a return of 15% per annum and stated to be underwritten. The applicant wrote on the document that it was personally guaranteed. Mrs Matt paid $200,030 into FP's account. The funds were dispersed in payments to other investors, staff, accountancy services and rent, the applicant's credit card account and withdrawn in cash. The applicant offered to become Mrs Matt's business partner in a cosmetic medicine clinic. The applicant rented and fitted out premises for the business. Mrs Matt managed the business and the applicant managed its cash flow and paid its bills. Mrs Matt received a number of interest payments. When they ceased, the applicant claimed he had put the money back into their business. Ultimately, Mrs Matt demanded to know where her money was and the applicant told her it was gone. Count 2 Mrs Matt referred Fiona Russell to the applicant to discuss her financial affairs. Mrs Russell ran a catering business and cared for her husband who had suffered a stroke. The applicant claimed he was an expert in property management and shares and said he had a high success rate in venture capital projects. He persuaded her to take out a loan for investment purposes. Mrs Russell entered into an investment security contract with FP relating to an investment of $500,000, promising a return of at least 15% per annum. $495,580.98 was paid into FP's account. Mrs Russell received a number of interest payments. The funds were largely dispersed in payments to other investors, staff, rent, solicitors, a business of Mrs Matt, and the applicant's credit card account. Mrs Russell noticed the interest payments were late and demanded the return of her money or she would complain to ASIC. The applicant offered to repay the money in instalments but did not. Count 3 Mrs Matt referred Heide McConkey to the applicant in mid-2004 for advice regarding investment of an inheritance. The applicant claimed he was licensed and experienced in financial planning. He said his company's investments included a biotechnology project that he claimed was underwritten. Mrs McConkey transferred $230,000 into VCM's account. The applicant gave her a receipt for shares. The funds were dispersed in payments to other investors, employees, equipment for the applicant and Mrs Matt's business, and the applicant's credit card account. The applicant also drew a number of cheques for the purchase of a property at the request of another investor who had demanded the return of his money. Count 4 Mrs Matt referred Per Hassell, Mrs McConkey's partner, to the applicant in mid-2004 for superannuation advice. The applicant claimed he was experienced in investment planning. He promised Mr Hassell a return of 15% on his superannuation. Mr Hassel signed a superannuation fund trust deed. $120,000 was paid into FP's account. The funds were dispersed in payments to other investors, staff, rent, an accounting service, a business of Mrs Matt, and the applicant's credit card account. Mr Hassel paid further contributions totalling $27,200. Mr Hassel asked the applicant what he did with the last payment and the applicant said he put it "in biotech". Mr Hassel's money was not repaid. Counts 5 & 6 Mrs Russell referred Phillipe Perez to the applicant. Mr Perez operated a business providing staff for corporate functions and was going through divorce proceedings. The applicant claimed he was an experienced investment advisor. Mr Perez entered into an investment security contract with FP relating to an investment of $100,000, promising a return of at least 15% per annum. $100,000 was paid into FP's account. Mr Perez received a number of interest payments. $60,000 of the funds was dispersed in payments to other investors, staff, rent, legal services, and the applicant's credit card account. The applicant persuaded Mr Perez to refinance a mortgage and invest further money in a biotech company and derivatives. Mr Perez entered into an investment security contract with VCM relating to an investment of $100,000, with interest of at least 20% payable annually and any excess to be split with VCM. $188,799.30 was transferred into VCM's account. The applicant gave Mr Perez a receipt and a certificate for shares in the biotech company. Mr Perez received some monthly interest payments. The funds were dispersed in payments to other investors, employees, FP, rent, legal services, a business of Mrs Matt, the applicant's credit card account and withdrawn in cash. When interest payments ceased, Mr Perez corresponded with the applicant. Mr Perez received payments of $10,000 from FP, and $56,000 and $100,534.24 from VCM, before a further cheque was dishonoured. Count 7 Mrs Matt introduced Dee Bone to the applicant in 2003. Mrs Bone worked in the cosmetic industry. The applicant claimed he was a venture capitalist. He promised Mrs Bone and her husband risk-free property investment he personally guaranteed. They refinanced their home with the applicant acting as their mortgage manager. Mrs Bone and her husband entered into an investment security contract with FP relating to an investment of $200,000 with interest of at least 15% per annum. Sums of $200,000 and $44,000 were paid into VCM's account. The funds were dispersed in payments to other investors, staff, rent, equipment for the applicant and Mrs Matt's business, and the applicant's credit card account. Mrs Bone received payments of $20,000 from FP and $10,000 from VCM but no further payments. Count 8 Signa Furber met the applicant and Mrs Matt at a cosmetic industry conference. The applicant claimed he was a venture capitalist. Mrs Furber entered into an investment security contract with VCM relating to an investment of $200,000 with interest of at least 15% per annum. $200,000 was paid into VCM's account. The funds were dispersed in payments to other investors, staff, rent, an office fit-out, legal services, equipment for the applicant and Mrs Matt's business, and the applicant's credit card account. Mrs Furber became nervous about her investment. The applicant said he would personally guarantee the funds and gave her a backdated investment security contract. Mrs Furber received a number of interest payments. A monthly payment was not made and she demanded the applicant return her funds. The applicant said he could not return her funds as other investors had demanded that their funds be returned. Count 9 Mrs Bone introduced Jacqueline Schell and Brendan Mullard to the applicant in early 2006. Mrs Schell and Mr Mullard were partners in holiday property management and import-export businesses, and were setting up a new business. The applicant said he was a venture capitalist with access to services they would need in setting up their new business. He persuaded them to refinance their mortgage and said he was a licensed mortgage 'originator'. Ms Schell and Mr Mullard entered into an investment security contract with VCM relating to an investment of $250,000 with interest of at least 15% payable annually. $250,000 was paid into VCM's account. The funds were dispersed in payments to other investors, staff, FP, the applicant and Mrs Matt's business, and the applicant's credit card account. The applicant said $50,000 had been invested in the biotech company. Mrs Schell demanded their funds be returned but the applicant said he could not as a property transaction had not settled. Their money was not repaid.

The applicant's subjective circumstances 12The applicant was 49 years of age at the time of sentence. He had no record of previous convictions and was of prior good character. As he did not give evidence the information regarding his background derived from a pre-sentence report. 13The applicant and his family migrated from the United Kingdom and settled in Western Australia when the applicant was about six years of age. The applicant's father died in 1985. His mother returned to the United Kingdom but died in 2006. The applicant was estranged from an elder brother who resided in Perth. He is single. 14The applicant left school at the age of fifteen years. He commenced but did not complete university studies in commerce. However, he attained a diploma in financial services in 2005. After leaving school, the applicant started a cleaning company, then at nineteen years of age bought a fish and chip shop. He had since worked in the fishing, farming and hospitality industries. At 23 years of age, he found employment with a commodities broker. Between 1988 and 1991, he was employed with a bank and rose to the position of manager. The applicant was then a company director for fourteen years. In 1996, the company merged with a NSW mortgage broking business and he moved to Sydney. However, the company was liquidated in 2007 and the applicant filed for bankruptcy. 15The applicant had been employed with a hire car business for the four years prior to sentence. He had resided in rented accommodation since his arrival in Sydney and was living in a backpacker's lodge at the time of sentence. 16The judge did not accept that the applicant was remorseful and rejected the probation and parole officer's assessment that he presented a low risk of re-offending. The judge considered rather that the applicant posed a high risk of re-offending.

Reasons for sentence 17The sentencing judge set out in greater detail the facts summarised above. Appropriately, in my view, his Honour described the contents of the victim impact statements provided in each case as "very sad documents". His Honour found (AB 48): All of them are statements from people who have lost everything as a result of these false claims and the operation of this scheme. All of them believed this man, all of them regarded him in some way as a friend whom they could trust, and because they felt they could trust him they gave him money on his say so as to what he would do with it. 18His Honour expressed his conclusions in the following terms (AB p50-53) The reference to Mr Madoff is a reference to United States v. Madoff, No. 09 Cr. 213 (S.D.N.Y. June 29, 2009): The plain fact of the matter is that this scheme, just as with Mr Madoff's much bigger scheme, is a big sham. At no stage did he invest in anything, and at no stage did he intend to invest in anything. His only intention was to deceive people into giving him money by making false representations of wealth and success. It is easy, as I have said, nowadays, these years afterwards, to look back and say how would anyone be taken in by this. The plain fact is that people like the current offender have great skill, charm and ability to persuade, and people who are normally businesslike, calm and considered in their approach are taken in. Any of the current investors who feel bad about it should realise, and they can if they want to, look up what Mr Madoff did in New York and realise the sorts of people who were taken in by Mr Madoff. People who had put in millions, tens of millions, hundreds of millions, believing they were going to get a magnificent return and these were people of considerable wealth and ability. Ponzi schemes must be actively discouraged by the courts and those who engage in them can expect to receive harsh sentences. This man must be sentenced for what he did. He was not a trustee for anybody, he did not breach trust in the normal sense. He betrayed friendship, he made false claims, he caused financial ruin and enormous hardship. His victims are human beings and in many ways false representations like this to ordinary citizens are far worse than false representations of this type made to large companies that also happens from time to time. I am aware myself of two individuals who managed to persuade very large companies to make over very large cheques to them on false representations, I am talking of tens of millions of dollars. So these sorts of people can operate anywhere and at any level. He has to be dealt with for what he did and not for what anybody else did. But an element of the sentence has to be the protection of the community. On occasions that requires a longer sentence than would be imposed otherwise. I think it is called for in this case because I see not the slightest evidence that he has any appreciation of the damage and destruction he has caused or any concern about what has happened to anybody. There of course must always be some hope of rehabilitation. But as I have said before, I do not accept the report of the Probation and Parole Office because I think it is based on their acceptance of false representations made by him. Ultimately I have come to a conclusion that I should impose on him a sentence that may be seen to be one of the toughest sentences ever imposed and that is a sentence of ten years imprisonment with a six-year non-parole period. I am imposing that because general deterrence requires that people be discouraged actively from engaging in these schemes. Individual deterrence requires that he be prevented from engaging in these schemes for a considerable period. The protection of the community requires that he not be able to do it for a considerable period. The possibility of rehabilitation must always be there but I think it is very low down on the list. Anybody who engages in conduct of this type has a lot of work to do to rehabilitate himself and rehabilitation in my opinion only comes if he does something effective to repay the people whose money he took and misused. The principle of totality requires that I must look at sentences that are imposed and ensure that in an overall sense no sentence is too large. It requires that I must combine some of the sentences to ensure that that occurs, otherwise I would be putting him there for too long. In America that principle does not apply and you can put people away for as long as you like. But we do not impose in this country 100-year sentences or 150 year sentences. It is absurd. He has to be given the opportunity of rehabilitation. As a white-collar offender the very distinct probability is that at an early time he will be transferred to a minimum security institution and indeed I am going to recommend that that be done and to be classified as soon as possible with a view to being moved to a such an institution. Ultimately depending on how he behaves himself he can be given weekend leave and even leave during the week to work. That depends on him, I have no say in classifications and I am certainly not recommending that anything be done other than that he be classified as soon as possible. I direct that these sentencing remarks be sent to the Director of Classifications of the Department of Corrective Services so that that department can move to deal with his classification as soon as possible. The individual sentences that I impose are as follows. Count 1, I have decided I should impose a maximum sentence for the offence committed against Mrs Matt of five years, but reduce it by ten per cent to four years and six months because of his plea of guilty. I impose the harsher sentence for that one only because he used her as an unwilling or an unwitting accomplice. He used her to recruit others. She did not know anything about what he wasup to, and I think that should be recognised. For the other sentences in the main they will be three years and seven months or thereabouts. For Counts 7, 8 and 9 they will be a straight four years. As will be seen that is done to ensure that in an overall sense a greater sentence is not imposed than it should be imposed. So count 1 will go from 16 December 2011 to 15 June 2016. Count 2 will go from 16 December 2012 to 21 July 2016. Count 3 will go from 16 December 2013 to 21 July 2017. Count 4 will go from 16 December 2014 to 21 July 2018. Count 5 will go from 16 December 2015 to 21 July 2019. Count 6 will go from 16 December 2016 to 21 July 2020. Count 7, 8 and 9 will all go from 16 December 2017 to 15 December 2021, they will be concurrent with each other. There will be a non-parole period of six years, that will go from 16 December 2011 to December 2017. He will be eligible for parole on that day.

Grounds of appeal 19The applicant advances three grounds of appeal as follows: (1)The judge mistook the facts; (2)The judge erred in failing to determine a proportionate sentence in respect of each count; (3)The sentences are unreasonable and/or plainly unjust.

The submissions of the parties 20Counsel on each side of the record argued his case with a great deal of skill and persuasion. 21Mr. T. Gartelmann of counsel, who appeared for the applicant, argued that the sentencing judge mistook important facts relevant to the assessment of the objective seriousness of the applicant's offending. Consequently, counsel argued, he overstated this most significant consideration. A particular example of this related to Counts 5 and 6. The victim was Mr. Perez. It was said his Honour made two particular errors. First, he found that Mr. Perez had invested $500,000, rather than $300,000. Secondly the judge found that the whole of that money had been lost, when in fact the applicant had caused some payments to be made to Mr. Perez as a return on his "investment". Payments received by Mr. Perez totalled about $166,500. It was submitted that the error was material because the amount of money involved in a case of premeditated deception is an important factor in determining the extent of criminality: R. v. Mungomery [2004] NSWCCA 450; 151 A Crim R 376 at 384 [41]; R. v. Hawkins (1989) 45 A Crim R 430 at 436. Section 16A(2) Crimes Act requires a court to take into account such matters as are relevant and known to the court, including any loss suffered by the victim. It was submitted that overstating the loss, as his Honour did, meant that the sentencing discretion in the case of Counts 5 and 6 must have miscarried, and the error must have infected the whole process. 22The second ground of appeal was founded on contravention of the principle discussed in Pearce v. The Queen [1998] HCA 57; 194 CLR 610 at 624 [45]; Johnson at 624 [26]. Counsel argued that it was clear that his Honour had adopted an initial "global approach" from which he had reasoned back to an assortment of sentences which was an impermissible "top-down-approach". Moreover there was no discernible consistency of approach, suggesting individual sentences were adjusted to justify the result. Such an approach offends Pearce: R. v. Swadling [2004] NSWCCA 421 [57]; Yeonata v. R. [2012] NSWCCA 211 at [51]. 23Ground 3 raised manifest excess. Mr. Gartelmann pointed out that four of the individual sentences imposed were for terms of four years or more. This was close to the statutory maximum five years reserved "for the worst type of case falling within" the section: Ibbs v. The Queen [1987] HCA 46; 163 CLR 447 at 451 - 2. 24As the amount involved and the period over which the deception was practised were key indicators of the objective seriousness of the offending, morally culpable as these cases were, it could not be said that they fell into the worst type of case, even accepting that the circumstance that the victim of each offence was an individual who suffered personal hardship as a consequence of the offending may be an aggravating circumstance. Counsel referred to Braun v. The Queen [2008] NSWCCA 269; 190 A Crim R 497 at 512 [75], and 513 [81]. 25Learned counsel for the Crown accepted that the sentencing judge may have overstated the amount "invested" by Mr. Perez. However, it was submitted that his Honour was not wrong in concluding that the amount actually "invested", being $300,000, was virtually a total loss. This argument was fleshed out by reference to a schedule, MFI 1 handed up without objection, which summarised the evidence in relation to Counts 5 and 6, including the amounts paid to Mr. Perez out of the funds of other "investors". The total loss was said to be $289,715.76. But more importantly, submitted counsel, in the case of a Ponzi scheme, the precise calculation of the scale of the fraud was less significant than the brazen and calculated continuing course of conduct involved in the ongoing criminal enterprise: Fasciale at 498 [53]; Hoy at [17] - [20] and at [25]. 26In relation to Ground 2, the Crown submitted that the applicant's invitation to the Court to focus upon the precise calculation of the loss suffered by each "investor" was "apt to give rise to error" of the type identified in Wong v. The Queen [2001] HCA 64; 207 CLR 584 at 611 [74] - 612 [76]. Instead, s.16A (2) Crimes Act requires the instinctive synthesis approach which calls for consideration of all the facts, matters and circumstances relevant to fixing the appropriate sentence for the offence, and the offender. There was no Pearce error because his Honour did fix appropriate sentences for each individual offence. Fixing concurrent four year terms for each of Counts 7, 8 and 9 was an acceptable approach to reflect the consideration of totality which his Honour expressly referred to at the foot of AB 51. 27The Crown submitted that the overall effective sentence was not manifestly excessive. The present case was an example of "serious white collar crime" requiring "condign sentences": Pantano v R (1990) 49 A Crim R 328 at 330. In a case like the present where the individual counts were instances of an ongoing fraudulent course of conduct or a criminal enterprise, a "broad-brush" approach to the fixing of sentences was permissible: Day v. The Queen [2011] VSCA 243 at [17] - [18].

Resolution 28I would reject Mr. Gartelmann's first ground by reference to the judgment of Redlich JA in Hoy v. The Queen [2012] VSCA 49 [17] - [20]: [17] When a sentencing judge is required to impose terms of imprisonment on a large number of counts, it has often been recognised that the sentencing judge may, within limits, adopt a "broad-brush" approach to the fixing of sentence. For example, such an approach may be appropriate where there was an ongoing fraudulent course of conduct, a single fraudulent or common enterprise or where the criminal behaviour on counts was of a similar and repetitive nature. [18] There is much authority to the effect that sentences imposed in such circumstances need only be roughly proportional to the gravity of the offences and the amount taken. This is not the first time that it has been necessary to state that structural objections to the sentences imposed in such cases is to be discouraged unless they reveal error in the instinctive synthesis. Where a judge is entitled to adopt a broad-brush approach, disconformity between sentences on particular counts will not usually provide a sufficient basis to impugn the instinctive synthesis. [19] In circumstances such as the present, the sentencing judge was not required to give the same level of attention to each of the sentencing considerations which bear upon the fixing of each individual sentence. Counts 31 and 37 were not committed in isolation. They were a necessary part of the applicant's scheme used to prop up the facade of Chartwell's prosperity. There was a detailed deception of the Commonwealth Bank involving the creation of false documents which entirely misrepresented the company's financial circumstances. The monies obtained from the CBA enabled the applicant to pursue individual investor victims and avoid calls being made on earlier investments. [20] While the effect of the crime upon an individual victim is a relevant sentencing consideration, it has never been said, nor do I think it correct to imply, that the sentence imposed for an offence against an institution should necessarily be less than a sentence to be imposed against an individual where the value of the theft is of the same order. As Gleeson CJ stated in Machtas, general deterrence is an important consideration in relation to activities which cause a serious financial loss to banks. His Honour rejected the submission that a matter to be taken into account was that the loss was to a large financial corporation. His Honour thought the better view was that it was the absence of an aggravating circumstance that there was no victim who was caused personal hardship. There are of course direct consequences for the institution and potential indirect consequences for many individuals where major fraud is committed against institutions. The need to deter those who would seek to commit such fraud remains a primary consideration. 29In the same case at [25] Nettle JA said: Punctilious identification of distinguishing features as between offences doubtless has a role to play in some sentencing exercises. But, in cases like this, involving multiple counts of systematic and serious fraud, its utility tends to be limited. See also Day v. The Queen at [24]. 30In R. v. Machtas (1992) 62 A Crim R 179 at 182, Gleeson CJ (with whom Handley JA and Badgery-Parker J agreed) said: It was submitted on behalf of the respondent that a matter to be taken into account in her favour is that the victim of the loss was a large financial corporation. I reject that submission. It may be more accurate to say that it is not an aggravating circumstance of the present offences that the victim was some individual who suffered great personal hardship as a result of them. The learned sentencing judge, by implication, adopted this approach: AB 36 - 37. 31The authorities Mr. Gartelmann referred to indicate that the amount involved, and the period over which the deception was practised, are important markers of objective seriousness. And, of course, the applicant "was entitled to have the relevant factual matters carefully and accurately considered by the [sentencing] court": Johnson at 625 [32]. However, his Honour did not mis-state the total amount involved in this fraud of $1.96 million. And like Weinburg JA in Fasciale I consider that it "matters little" whether a victim was robbed of $300,000 or $500,000 in the overall scheme of things. On any view, retribution, protection of the community, deterrence, both general and personal, factors to which the judge made express reference, all required condign punishment in this case. 32I accept the force of the argument on behalf of the Crown that any undue focus upon the precise calculation of the loss suffered by each "investor" itself ran a risk of error of the type identified in Wong, which as I understand it, is singling out one factor as decisive, as opposed to the due consideration of all relevant facts, matters and circumstances. In my judgment, the consideration that the effect on each victim was ruinous, in the circumstances of this case was a more compelling consideration, among many, than the precise calculation of the amount involved. 33In my judgment, Mr. Gartelmann has made good his second ground. I take it to be firmly established that when sentencing for multiple offences, the approach described in Pearce at 624 [45] must be followed. McHugh, Hayne and Callinan JJ said that the sentencing judge must fix an appropriate sentence for each offence and then go on to consider the other questions (my emphasis). Moreover, at [46] their Honours emphasised the importance of applying "proper principle" throughout. The need to faithfully adhere to this sequence has been frequently emphasised by this Court including in Swaddling and Yeonata to which we were referred by Mr. Gartelmann (see [22] above). As Smart AJ pointed out in Swaddling at [50], Pearce was reiterated by Gummow, Callinan and Heydon JJ in Johnson at 624 [26]. What their Honours said there may be taken as supporting some degree of flexibility in the application of Pearce. However, whilst acknowledging that, their Honours emphasised that it is "undesirable ... to have regard only to the total effective sentence to be imposed on an offender" (emphasis in the original). It may be argued that "undesirable" is not an imperative word. However, it is clear from the decisions of this Court to which I have referred that the adoption of a "global approach", which may be acceptable in some States (e.g. see Lovell), has been regarded as impermissible in New South Wales, leaving s.53A Crimes (Sentencing Procedure) Act 1999 (NSW) to one side. 34Swaddling acknowledged an available flexibility when sentencing for multiple offences. And I would understand that to be the thrust of the approach of Redlich and Nettle JJA in Hoy. But as Swaddling makes clear, this flexibility does not extend to first fixing the total effective sentence, then working backwards from there to structure a series of sentences to justify the result first pronounced. In my view, such an approach directly contradicts Pearce, an option not available to this Court or a primary sentencing court. 35The decision in Pearce itself explains why the proper order must be adhered to. One reason is the need to avoid double punishment. That cannot be achieved unless each individual offence is addressed separately. There may be no single correct answer to a sentencing conundrum, but a single sentence is required to be imposed in accordance with "proper principle". Unless the Pearce approach is followed, the subsequent questions of "cumulation or concurrence, as well ... as questions of totality" will result in orders "made on an imperfect foundation". Separate consideration of the appropriate sentence on each count ensures consistency and avoids "artificial claims of disparity between co-offenders". It also avoids distortion of "general sentencing practices in relation to particular offences". 36Consideration of the whole passage in Johnson at 624 [26] justifies some degree of flexibility, but only at the first stage of fixing the appropriate sentence for each individual offence. Neither the approach in Hoy or the approach in Tichy, favoured as the latter was by Gleeson CJ in Johnson, justifies starting with the total effective head sentence and, from there, adopting a "top-down" reasoning process. 37For my part, I have reservations about his Honour's statement that he had come to a conclusion that he "should impose [on the applicant] a sentence that may be seen to be one of the toughest sentences ever imposed". It is one thing to recognise that offences of this type call for condign punishment. That consideration brings considerations of retribution and general deterrence sharply into focus. But it is quite another to set out to impose the sentence that falls into the "toughest" category. To my mind, this is an irrelevant consideration. The process of instinctive synthesis may well produce a heavy sentence in a case like the present. This consideration, however, is a very good reason for adhering to the proper sequence mandated by Pearce. Starting with a conclusion, as the plurality said in Pearce, "is likely to mask error". 38As I have accepted Mr. Gartelmann's argument in relation to Ground 2, it is unnecessary to go on to consider Ground 3 and the question of manifest excess. The detection of specific error is inimicable to the manifest excess ground: Wong v. The Queen [2001] HCA 64; 207 CLR 584 at 605 [58]. Further consideration of Ground 3 is therefore superfluous.

Re-sentencing 39As the applicant has succeeded on Ground 2, it is necessary to consider the statutory question posed by s.6(3) Criminal Appeal Act, namely, whether I am of the opinion that some other sentence is warranted in law. This can only be determined by sentencing the applicant in accordance with the proper principles established by Pearce. 40In re-sentencing, I think it appropriate to adopt that flexibility discussed by Wells JA in Tichy, and Smart AJ in Swaddling. I find, by reference to the nine individual counts, that the applicant "was truly engaged upon one multi-faceted course of criminal conduct". The sentences imposed must properly reflect that consideration. Moreover, and along the same lines, I think it appropriate to adopt the limited "broad-brush" approach discussed in Hoy. As Nettle JA explained in Hoy at [23] this permits me to take into account the similarity of offending, and the level of stress, inconvenience and financial loss suffered by the various victims without the need for "punctilious identification of distinguishing features as between offences". 41In approaching each sentence, I will bear in mind the ruinous financial affect of the applicant's offending on each of his victims. That they are individuals who have suffered significant personal hardship because of the offending is, I find, a significant aggravating factor in the applicant's offending: s.16A(2)(d)(e). 42I accept, as the sentencing judge did, that this type of white-collar crime calls for condign punishment to further the general purposes of sentencing including exacting retribution, general deterrence, individual deterrence and, significantly, the protection of the community. So far as there is scope for rehabilitation, especially in the interest of the community, the opportunity for supervised release should be provided. 43Previous good character is a factor of less relevance in white-collar fraud. The appearance of respectability is exploited in such cases. And the engagement in an extended criminal enterprise, once exposed, diminishes the credit which good character might otherwise bestow. 44In adopting the "broad-brush" approach, I propose to deal with Count 1 separately because I substantially agree with the sentencing judge that the sentence in respect of the offence against Mrs. Matt should be harsher than the others because of the additional factor of the applicant using her "as an unwilling or an unwitting accomplice ... to recruit others". As Mr. Gartelmann conceded in argument, the moral culpability of the offender is high in respect of all offences, but especially in respect of Count 1. 45I have also borne in mind, in respect of all matters, the ten per cent allowance his Honour made for the, albeit, late plea: s.16A(2)(g). 46I also bear in mind that the maximum sentence for each count is imprisonment for five years. I do not quite agree with the sentencing judge's assessment that Count 1 fell into "the worse possible case": Markarian v. The Queen [2005] HCA 25; 228 CLR 357 at 372 [31], but I find that it is close to that category. In my judgment a term of imprisonment of four years, bearing in mind the discount, commencing on 16th December 2011, should be imposed for that offence. 47I propose to deal the remaining eight counts by applying Thicy and Hoy. In my judgment this is appropriate because the applicant's offending is an ongoing fraudulent course of conduct, and although the monetary amount involved in each case differs somewhat, the criminal behaviour embraced in each individual offence is "strikingly similar": Day at [24]. For this reason, and to preserve some relativity with Count 1, I propose a term of imprisonment of 3 years and 6 months in respect of each of Counts 2 to 9. 48I turn then to consider questions of cumulation, concurrency and the totality of criminality. Thicy, on one view, would permit me to run all these sentences concurrently. However, in my view such an approach would not properly reflect the criminality of each matter, nor recognise the losses, financial and emotional, suffered by each victim. The application of the principles discussed in Pearce in my view calls for a significant degree of partial accumulation. I propose to group Counts 2 to 4 concurrently, and to accumulate those sentences on the sentence for Count 1, commencing them on 16th of December 2013. I will also run the sentences for Counts 5 to 7 concurrently, but partially accumulating them on the sentences for Counts 2 to 4, commencing this group of sentences on the 16th December 2015. The sentences for counts 8 and 9 will also be served concurrently, and partially accumulated to commence on 16th June 2017. 49The last of the sentences I have proposed would expire on 15th December 2020, a total effective term of imprisonment of 9 years. In accordance with s.19AB Crimes Act, I would fix a single non-parole period. Maintaining the relativities fixed by the sentencing judge to take account of the applicant's subjective case, including the possibility, such as it may be, of rehabilitation, suggests a non-parole period of nearly 5 years and 5 months, which I would round up. 50It may be said, with some force, that re-sentencing the applicant in accordance with the immediately preceding paragraphs amounts to "tinkering", a process which this Court firmly eschews. Such a conclusion would support leaving the sentence as is, error of principle notwithstanding. I have anxiously considered this, and concluded that the better view is that the error of fundamental principle should be corrected, and the applicant accorded whatever reduction in imprisonment flows from being sentenced according to law. In so saying I remain conscious that sentencing a given offender for a particular offence is not a process calculated to produce a single correct result: minds may reasonably differ. Nonetheless only one sentence may be imposed. And it must be imposed by the application of "proper principle": Pearce at 624[46]. 51It follows from this that I am of the opinion that a lesser sentence than that passed by the sentencing judge is warranted in law. 52The orders I propose are: (1)Grant leave to appeal; (2)Appeal allowed; (3)Quash the sentences passed on the applicant in the District Court and instead sentence the applicant as follows: (a)In respect of Count 1, a term of imprisonment of 4 years commencing on 16th December 2011 and expiring on 15th December 2015; (b) In respect of each of Counts 2, 3 and 4, a term of imprisonment of 3 years and 6 months commencing on 16th December 2013 and expiring on 15th June 2017; (c)In respect of each of Counts 5, 6, and 7, a term of imprisonment of 3 years and 6 months commencing on 16th December 2015 and expiring on 15th June 2019; (d)In respect of each of Counts 8, and 9, a term of imprisonment of 3 years and 6 months commencing on 16th June 2017 and expiring on 15th December 2020; (e)Pursuant to s.19AB Crimes Act 1914 (Cth), I fix a single non-parole period of 5 years and 5 months commencing on 16th December 2011 and expiring on 15th May 2017. The applicant will be eligible for release after 15th May 2017. 53BARR AJ: I agree with Campbell J

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