Court of Appeal (WA)|2002-06-17|Before: Parker J, Murray J, Steytler J

Grubb v The Queen [2002] WASCA 158 (17 June 2002)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : GRUBB -v- THE QUEEN [2002] WASCA 158

Criminal law and procedure - Sentencing - Stealing money with a direction and stealing - 33 offences over 17 months - Loss of $5.2 M - Analysis of comparable cases - Relevance of applicant's mental condition - Relevance of prior good character - Matters relevant to sentence discussed - Aggregate term of 10 years imprisonment upheld.

Applicant : Unrepresented Criminal Appellants' Scheme

"B" (A Child) v R, unreported; CCA SCt of WA; Library No 950482; 15 August 1995

Gardiner v The Queen, unreported; CCA SCt of WA; Library No 940121; 3 March 1994

Jarvis v The Queen (1993) 20 WAR 201

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

Paparone v The Queen [2000] WASCA 127

R v Black [2002] WASCA 26

R v Cartwright (1989) 17 NSWLR 243

R v Gallagher (1991) 23 NSWLR 220

R v Jeffree, unreported; CCA SCt of WA; Library No 980150; 6 April 1998

R v Sivandran, unreported; CCA SCt of WA; Library No 960154; 22 March 1996

S v The Queen [2000] WASCA 34

X v The Queen [2000] WASCA 355

1 MURRAY J: I am obliged to Parker J for his Honour's comprehensive judgment. It deals completely for me with the issues raised by this application for leave and with the considerations generally applicable to sentencing offenders for this type of offence.

2 I have nothing to add to his Honour's reasons but to express my respectful agreement that leave to appeal should be granted in this case but the appeal should be dismissed.

3 STEYTLER J: I have had the advantage of reading the reasons for decision to be published by Parker J. I agree with them and with the orders proposed. There is nothing I wish to add.

4 PARKER J: The applicant seeks leave to appeal against sentences totalling 10 years imprisonment imposed on him by the Chief Judge of the District Court on 6 September 2000. The sentences were in respect of 33 counts, eight of stealing money received subject to a direction and 25 of stealing, to which the applicant had pleaded guilty on 30 August 2000. The commencement of the sentences was backdated to 11 August 2000 in view of time spent in custody by the applicant before conviction. The applicant was to be eligible for parole.

5 The total term of 10 years was arrived at as follows. Each count of stealing by direction attracted a sentence of 6 years imprisonment. Each stealing offence was dealt with by the imposition of a term of 4 years imprisonment. Having regard to the totality of the sentences, the terms for count 1 and count 3 in the indictment, being respectively the first count of stealing by direction and the first count of stealing, were ordered to be served cumulatively on each other, but concurrently with all other sentences. Thus the total effective sentence was 10 years imprisonment. His Honour indicated that he would have directed that the terms be served in such a manner that the total term would have been "in the order of 14 years", but he allowed a deduction of 4 years and so structured the sentences to produce a total term of 10 years.

6 The grounds of appeal contend that the sentence was excessive as there had been a failure properly to consider:

"(a) the maximum sentences for the offences,

(b) the standards of sentencing customarily observed for offences of this nature,

(c) the place which the criminal conduct in question occupies in the scale of seriousness of crimes of this nature,

(d) my personal circumstances, and

(e) the fact that I pleaded guilty to all charges at an early stage in the proceedings."

7 For some 30 years before the applicant was charged with these offences he had conducted a business as a real estate and finance broker. The business traded as Graeme Grubb Finance Broker but was in fact conducted by two incorporated bodies of which the applicant was a director and exercised effective sole control. The business became very successful, it being submitted to the learned sentencing Judge that the point was reached that between $70 and $80 million worth of loans were being administered at the time relevant to these offences.

8 It is unnecessary to detail the circumstances concerning each individual offence. They varied considerably. The offences charged were committed between October 1997 and March 1999. In many cases a client, who had been persuaded by the applicant to lend moneys for a specific purpose, paid those moneys to the applicant with the direction to apply them to that purpose, but the moneys were dealt with by the applicant contrary to the direction. In other cases moneys were repaid to the applicant by borrowers, but the applicant diverted the moneys to other purposes and did not repay the lenders. There were cases in which moneys entrusted to the applicant for secured investment, but without a specific direction, were used by the applicant to make good deficiencies he had created by other offences or for unsecured investments. It was also shown that money fraudulently misappropriated was used to reduce overdrawn accounts operated by the applicant in both his business and personal capacities, including the trust account of the finance and broking business which was at times in debit, and to meet interest payments due by companies in which the applicant had an interest.

9 It appears to have been a uniform understanding and expectation of clients lending money to be invested by the applicant that the money, when lent, would be secured by registered mortgages. In some cases the money was to be "pooled" with sums of money lent by other persons, there being but one mortgage to secure the total lending. In many cases, no security was put in place although the lenders were given to understand that the loan was secured. In other cases, secured loans were repaid in full but the funds were retained by the applicant and put to other uses or to unsecured investments, the lender being unaware of the repayment and the loss of effective security.

10 The total amount of loans the subject of the 33 counts was $5,205,481. These 33 counts were, however, a "representative sample" of the activities of the applicant in the conduct of the finance broking business which he conducted. The applicant, of course, only fell to be sentenced in respect of the 33 counts the subject of the indictment. The relevance of the accepted position that these 33 counts were but a representative sample was to deny the view that the 33 counts represented the totality of the applicant's criminal conduct or was, in that loose sense, isolated conduct.

11 Despite police and accounting investigation and an extensive public enquiry it was the position, as it was clearly explained to his Honour, that it was not possible to give a definitive answer as to what had become of all the money the subject of the 33 counts. The situation as disclosed to the learned sentencing Judge was that it may never be possible to determine what became of the money because of the nature of the applicant's conduct and the state of the records maintained by the appellant in his business. These records were described by his counsel as "chaotic".

12 It was accepted that, to at least a large degree, and irrespective of the directions given by, or the expectations of, the applicant's client lenders, funds had been directed by the applicant to two particular investments. These were Sandgate, a vineyard operation at Mount Barker and an agricultural scheme in the Ord River area. The submissions in mitigation indicate that in around the mid 1990's and thereafter the applicant propounded these schemes. The applicant had beneficial interests in both of the schemes. It was revealed to the learned sentencing Judge that the applicant was also concerned to direct funds to these schemes in return for commissions that were paid to his business at an attractive rate. It appears that the Sandgate scheme failed and the Ord River scheme came to nothing. It was accepted that the applicant had failed to effect securities in respect of moneys advanced to these schemes on behalf of the lenders whom the applicant represented.

13 When the matter was before the District Court the position was accepted that the victims of the 33 counts totalling $5,205,481 had then no immediate prospect of recovering the moneys they had invested, let alone interest on the investments, and that they may well never recover any part of their investment. That desperate position has not changed in the intervening period. The task of untangling what had become of clients' moneys at the hands of the applicant, and then of dealing with the extreme legal complexities arising from the lack of securities, the pooled securities, and a number of other difficulties are obviously formidable. Even if these matters could be overcome, it is to be expected that a great deal of time and cost would be involved with scant prospect of any actual recovery in the end.

14 The majority of the victims who had placed their money with the applicant's business for investment were elderly and usually were retired. In many cases they had entrusted their life savings to the applicant. The material before the learned sentencing Judge revealed, somewhat graphically, the devastation to their lifestyle, security and expectations which had been suffered by many of those who had entrusted funds to the applicant.

15 It was not contended against the applicant that ultimately he had benefited personally to any significant degree as a direct result of the 33 offences. Indeed, only in respect of count 21, which concerned the theft of $249,900, was it said that the money was directly applied to reduce overdrafts of the applicant himself and of entities related to the applicant, including a stud property. Generally, however, it is clear that because of difficulties being experienced by the applicant in the conduct of his business, and in particular a desire to direct funds to the Sandgate and Ord River schemes, the applicant not only misdirected clients' funds to these schemes but also overdrew his various business accounts, including his trust account, and then used money invested by other clients to make good the deficiencies. One effect of this pattern of conduct is that it enabled the applicant to continue to conduct an apparently successful business. This in turn encouraged existing lenders to continue to entrust funds to the applicant and new lenders to come forward and entrust moneys to him.

16 The circumstances of the offences were dealt with by his Honour in a summary to which no objection is taken on appeal. In the course of this his Honour rejected a submission, correctly in my respectful submission, that this really was a case of bad administration leading to a muddle that got out of hand. His Honour said:

"Mal-administration is simply not a term for the activities of the offender who, as I say, stood during this period of time, relying upon his 30 years experience in the business, and took from these investors their moneys, in my view and in my finding, at the time knowing full well that they would be disposed of in a manner that at best could be described as criminally reckless and this went on time and time again as investor after investor was defrauded. It was not negligence. It was criminal conduct. The investors had been left with mind-boggling legal problems in trying to trace their money and this will probably never be done."

"There is no doubt that his long experience in the mortgage broking business encouraged people to place their money with him without further question. It, therefore, amounts to a very considerably serious breach of trust in which the trust position which the offender occupied for many years was the lure for the moneys. ...

At the end of the day, the money was going (to investments) from where these funds will never be recovered and the great criminality here is where the offender time after time confronts a new investor, takes money from the fresh investor and disposes of it deceitfully and completely contrary to the investor's directions or intentions."

17 His Honour then expressly noted a number of matters that went to the applicant's credit. These were his co-operation, first with the public enquiry into finance brokers, and secondly his co-operation with the accounting authorities. This involved and included the applicant holding himself available to the liquidator over a period of some six months at the applicant's own expense. Further, his Honour noted that the applicant entered early pleas of guilty to the 33 counts under the "fast-track" system. His Honour noted that these were complex matters and that, had the offences been denied, there would have been lengthy criminal trials. This would have involved further distress for the complainants.

18 The applicant's submissions do not call into question the learned sentencing Judge's approach of fixing terms of 6 years imprisonment for each individual offence of stealing by direction and 4 years for each stealing offence. The maximum penalties for these offences are respectively 10 and 7 years' imprisonment. Given the circumstances of these offences those terms are clearly within an appropriate range. Indeed, in at least some of the cases, longer terms could have been well justified. Nor is it questioned that it was appropriate to have regard to totality.

19 It is submitted in essence, however, that in approaching sentencing on the basis that, without mitigation, a total term in the order of 14 years would have been appropriate, his Honour had fixed on a starting point that was too high. Further, it is submitted that the reduction of the sentence to 10 years was only in respect of the early pleas of guilty, so that his Honour failed to have regard, or adequate regard, to other relevant factors. In consequence of these two matters, the submission is that the total effective term of 10 years is too high.

20 The applicant first submits that his Honour approached the sentencing discretion in this case by first fixing a "starting point" of 14 years imprisonment; which was manifestly excessive. In support of this, it was submitted that his Honour relied heavily on the decision of this Court in R v Greenburg (1993) 68 A Crim R 392. It is submitted that his Honour approached the sentencing exercise using this decision, which he categorised as a similar case, as a framework of reference, but this reliance lead his Honour into error. In my view these submissions involve a misapprehension of his Honour's approach to the sentencing discretion in this case and of the relevance which his Honour saw in the decision in Greenburg.

21 In the course of his sentencing comments, having canvassed the circumstances of the offence, the effect upon the victims and the inability of the Court to compensate them, and matters which went to the offender's credit, his Honour then turned to consider two further submissions that had been put in mitigation. These concerned the health and the previous good character of the applicant. I will return to each of these in greater detail later in these reasons. For present purposes, however, what is relevant is that it was in this particular context that his Honour made reference to the decision in Greenburg. His Honour concluded that the report which had been tendered as to the applicant's medical situation had only the most marginal relevance to the applicant's culpability and to penalty. His Honour then went on to observe, that in the course of considering sentence, he had looked at some of the authorities, in particular Greenburg in which he saw a number of similarities to the present case. His Honour then drew three considerations relevant to sentence from Greenburg. First, the place of character and personal mitigating factors in this type of case. Secondly, that general deterrence was the prime consideration. Thirdly, the submission that the applicant intended ultimately to repay the money had his schemes succeeded did not tell in mitigation because, as in Greenburg, money had been deliberately spent in an unauthorised manner without any real prospect of it being repaid. Those are the only three matters to which his Honour made reference. He made no analysis of, and drew no comparisons with, the circumstances in Greenburg for the purposes of determining a "starting point" or touching on that issue.

22 Indeed, his actual approach to the sentencing process was clearly quite different from that advanced in the applicant's submissions. Rather than fixing on a "starting point", his Honour looked first at the question of what penalty was appropriate for the individual offences. I have already noted that in the context of maximum penalties of 10 and 7 years respectively for the two types of offences, and no doubt influenced by the number of offences with which he was dealing, his Honour fixed on uniform penalties of 6 and 4 years respectively for each of the offences. In my respectful view, these penalties are not excessive even when viewed in the context of those of the 33 offences that may be seen to rank as the least serious. On the other hand if attention is focussed on those offences which rank among the most serious, were they to be considered individually, the sentence upon which his Honour fixed as the general uniform level for each type of offence may be seen to be inadequate. That observation is not intended to reflect any element of criticism. I well accept the appropriateness of using a uniform sentence for each of the two types of offence in a case such as the present. Where large numbers of similar offences are being dealt with, the inadequacy of an individual sentence will be well countered by the overall sentencing outcome. As I have indicated no submission is advanced that the individual sentences of 6 and 4 years respectively for the two types of offence are excessive or inappropriate.

23 It was from that starting point, of 8 individual sentences each of 6 years imprisonment for the offences of stealing by direction and 25 individual sentences each of 4 years imprisonment for the other stealing offences, each of the offences being distinct in time and circumstance such as would otherwise warrant cumulative sentences, that his Honour immediately turned his consideration to the issue of totality. His Honour observed:

"Totality must intervene and be recognised as must also those matters touching upon the offender's plea of guilty at the first opportunity. Had the issue of the plea at the first opportunity not been present, I would have directed that the terms be served in such a manner that the total term would have been of the order of 14 years. The deduction allowed to the offender is that of 4 years reducing the term of imprisonment to 10 years."

24 Rather than fixing a "starting point" for the purpose of sentencing of 14 years, it appears to me that his Honour quite clearly was indicating that in his view of all relevant circumstances, save the pleas of guilty, the totality of the applicant's conduct would, in his view, have warranted a total term in the order of 14 years. In my respectful view, his Honour has weighed all factors relevant to the sentencing process, as he saw them, and reached the view that, as a matter of totality, a sentence in the order of 14 years would represent an appropriate synthesis of the relevant considerations, the pleas of guilty aside. The passage just quoted from his Honour's sentencing comments follows from his consideration of the factors relevant to sentence including the circumstances of the offence, the effect on the victims, matters going to the offender's credit, his health, previous good character, the importance of general deterrence and the prescribed statutory penalties. The general context of his remarks and the precise language chosen by his Honour in the passage quoted confirm, in my view, that his Honour was not approaching the sentence, or the matter of totality, by setting a "starting point" from which to make deductions for each individual factor that might count in the applicant's favour.

25 One factor alone was singled out to be marked separately, this was the early pleas of guilty. Without entering into debate as to the most appropriate approach to sentencing there is quite some support for the view that, when sentencing, there is justification for identifying the regard had to pleas of guilty, because of the hope that it may serve as an encouragement to others to plead guilty and to do so at an early stage in the proceedings. This is because of the significant advantage to the administration of justice and to those who are the victims and witnesses of crime, if, by pleas of guilty, the trial process can be avoided. As a matter of his legitimate discretionary decision, his Honour determined in this case to give a discrete quantified discount in respect of the pleas of guilty. Even though that is but one of a number of matters to be taken into account in the overall discretionary exercise, it is open to a Judge to take this course, although there is no obligation to do so. It is not submitted that 4 years was an inadequate allowance for the applicant's pleas of guilty to all offences. These were made at the outset and, as his Honour noted, thereby avoided the need for what would have been complex and lengthy trials and spared additional stress for the victims. In the circumstances they were confirmatory of the applicant's genuine remorse.

26 Thus, for the reasons given, in my view it is not correct that his Honour approached the sentencing discretion by fixing on a "starting point" of 14 years, or that he did so by virtue of the decision in Greenburg.

27 With respect to the principle of totality it is enough to note what was stated in Thomas, Principles of Sentencing, 2nd ed (1979), p 56 in the passage that was quoted with approval in Mill v The Queen (1988) 166 CLR 59 at 63 in the following terms:

"The effect of the totality principle is to require a sentencer who has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed and each properly made consecutive in accordance with the principles governing consecutive sentences, to review the aggregate sentence and consider whether the aggregate is 'just and appropriate'."

"Where the principle falls to be applied in relation to sentences of imprisonment imposed by a single sentencing court, an appropriate result may be achieved either by making sentences wholly or partly concurrent or by lowering the individual sentences below what would otherwise be appropriate in order to reflect the fact that a number of sentences are being imposed. Where practicable, the former is to be preferred."

This passage has been recently cited with approval and applied in R H McL v The Queen [2000] HCA 46; (2000) 203 CLR 452 at 457 per Gleeson CJ, Gaudron and Callinan JJ and has been applied on a number of occasions in this Court. In the end what is required is for the sentencing Judge to look at the totality of the criminal behaviour represented by the offences and ask what is the just and appropriate aggregate sentence for all the offences.

28 For this purpose some assistance may be provided by sentences imposed in comparable cases. That having been said, it is immediately obvious that considerable difficulties attend any resort to sentences in other cases. There is enormous scope for variation. No two cases are directly comparable in the circumstances of the actual criminal conduct, and the personal circumstances that tend in mitigation and give rise to special entitlements to leniency or discounts will vary considerably between cases. Nevertheless, as was observed by Gleeson CJ in Wong v The Queen [2001] HCA 64; (2001) 185 ALR 233 at 236:

"The outcome of discretionary decision-making can never be uniform, but it ought to depend as little as possible upon the identity of the judge who happens to hear the case. Like cases should be treated in a like manner. The administration of criminal justice works as a system; not merely as a multiplicity of unconnected single instances. It should be systematically fair, and that involves, among other things, reasonable consistency."

Of course, these observations were made in the particular context of guideline judgments. They also serve, however, to commend consideration of comparative sentencing patterns, notwithstanding the difficulties of making appropriate comparisons.

29 In this context we were referred to the case of R v Nicholls (1991) 53 A Crim R 455 where the Court of Criminal Appeal of South Australia considered the case of a land broker, of previously unimpeachable reputation and integrity and who had been active in community affairs, who used trust money in a series of real estate speculations. He pleaded guilty to 17 counts of fraudulent conversion involving in all $724,000. His bankrupt estate would repay 30 cents in the dollar and the balance of the sums converted would be met by a statutory indemnity fund so that all victims received full repayment of the capital moneys due to them and at least some amount on account of interest. The victims nevertheless had, in some cases, experienced a substantial degree of short-term hardship. It was accepted by the Court that he freely admitted his part in the various transactions to the police officers and eventually entered pleas of guilty on arraignment although this was not at the first opportunity. It was accepted that there was genuine contrition and that he had been willing to cooperate with the authorities. On appeal a sentence of 10 years imprisonment with a non-parole period of 7 years was reduced to a sentence of 8 years imprisonment with a non-parole period of 6 years.

30 In that case, at p 460 of the report, reference was made to a number of other sentences. Of these, the case of Winzor involved a total defalcation of $4.6 million comprised in 135 offences. A sentence of 12 years imprisonment with a 9 year non-parole period was imposed. Hodby involved a total defalcation of $3.8 million in 141 individual offences. The sentence imposed was 12 years' imprisonment with a non-parole period of 9 years. It was noted that the "truly astronomic sums of money involved were not recouped to the victims in full" and the mitigating circumstances were not, on the face of it, "such as to attract greater recognition than" Nicholls. In the case of Schillier the total defalcation was $1.7 million comprising 49 offences. A sentence of 10 years was imposed with a 71/2 year non-parole period. In the case of Zoneff the total defalcation was $375,000 over 55 offences. The sentence imposed was 10 years imprisonment with a 7 year non-parole period. It was noted that a circumstance of aggravation was that there was no prospect of restitution.

31 In this Court there was the decision of Greenburg (supra). A total of 51 counts of stealing totalling in all $4,063,184 were alleged in one of three indictments. Greenburg had pleaded guilty to these 51 counts. She also pleaded guilty to 3 counts of contraventions of the Corporations Law in a separate indictment_._ These involved a failure to deliver up property to a receiver, a destruction of records, and an attempt to destroy other books. There was one further count charged in a third indictment being a contravention of s 32 of the Bushfires Act 1954 (WA) by lighting a fire. This was in truth a partially successful attempt to destroy records. Greenburg was a director of two companies trading as investment brokers. Moneys invested by a student guild and a number of individual investors were misapplied. In the order of $2.9 million found their way into Greenburg's personal account and was disposed of by her. Greenburg's conduct was shown to involve deliberate, systematic and planned criminality over a two year period. It was seen as an aggravating factor that many small investors had lost their life savings. While Greenburg had pleaded guilty to all counts this had not been until the first day of trial and no remorse was seen to accompany the pleas. Nevertheless, Greenburg had cooperated in avoiding committal proceedings and having all matters heard together. Greenburg was originally sentenced to a total effective term of 141/2 years imprisonment in respect of the 51 counts in the first indictment, with eligibility for parole. She was sentenced to a further total term of 4 years imprisonment, to be served cumulatively on the 141/2 years, in respect of the second indictment, with a non-parole period of 2 years. In respect of the third indictment a concurrent term of one years imprisonment was imposed, with eligibility for parole. Hence, there was a total effective term of 181/2 years imprisonment. This was reduced to 17 years by reason of time spent in custody.

32 On appeal a total effective term of 131/2 years imprisonment was imposed in respect of the 51 counts of stealing in the first indictment. This was after an allowance of 18 months for the pleas of guilty. There was a further adjustment to allow for time spent in custody before arraignment. The sentences in respect of the second indictment were altered so that a total of two years imprisonment, cumulative upon the sentences imposed on the first indictment, was imposed, of which 12 months was to be served before parole eligibility. The concurrent term of one year imprisonment in respect of the third indictment was not altered. Thus the total effective sentence, leaving aside the adjustment for time spent in custody, was 151/2 years imprisonment, with parole eligibility for the State offences and 12 months to be served before parole eligibility for the Commonwealth offences. It is clear that the totality principle guided the determination of the total sentence, and affected the individual terms and the sentences imposed in respect of each indictment. Both the trial Judge and this Court approached sentencing in respect of the 51 counts in the first indictment from a starting point of a total term of 15 years imprisonment. While that had been reduced by 6 months by the trial Judge by virtue of the plea of guilty, that deduction was increased to 18 months by this Court.

33 There are a number of obvious differences between the circumstances in Greenburg and the present case. While there were more counts in the first indictment in Greenburg the total sum involved was higher in the present case. In Greenburg a substantial part of the money stolen was applied by her to her own purposes. There is thus a greater element of personal greed than in the present case, although it is to be observed that the present applicant acted in part out of financial self interest. Insofar as Greenburg involved deliberate, systematic and planned criminality over a two year period there is little to distinguish it from the present case. In both cases many small investors lost their life savings. Significantly, genuine remorse was absent in the case of Greenburg, and she did not cooperate with the authorities and the pleas of guilty were not entered at an early stage. She had however suffered from a depressive illness over a number of years including the period of the offences.

34 In Greenburg at 408 the Court also referred to the case of Glenister v The Queen (1980) 2 NSWLR 597. In that case an aggregate effective sentence of 12 years imprisonment was imposed on Glenister, and of 13 years on a co-accused. Glenister had been charged with 26 counts but was convicted only on 7 counts. The case was concerned with the fraudulent misapplication of company funds. The total amount of the funds is affected because, in part, they were in United States dollars, but at the time they totalled in the region of AUD$1 million. As was observed by this Court at 408 in Greenburg:

"In our view the amount of money involved, the number of people that have lost and the applicant's conduct would bring it significantly above any range which that case might indicate."

35 We were also referred to the decision in R v Black [2002] WASCA 26 where a sentence of 6 years was imposed, that being arrived at by reducing a term of 9 years to 6 years by virtue of pleas of guilty, in respect of four counts of stealing as a servant by a bank officer involving in all nearly $2.2 million. The offences had been committed over a period of some seven years. It is immediately apparent that both the number of sentences and the total amount involved are significantly different from the present case. Further, Black came before this Court by way of a Crown appeal against the inadequacy of the sentence imposed. In the end the appeal failed, the Court observing that while the sentence "may, indeed, may have been lenient in relation to the seriousness of the offences and the lengthy period during which the defalcations were carried out", nevertheless, bearing in mind that it was a Crown appeal the Court was not persuaded that the sentences were so lenient as to demonstrate error.

36 Subject to further observations that will be made in these reasons about particular aspects of the Greenburg decision, the assistance that may appropriately be derived from the "comparative" sentences to which we have been referred does not, in my view, serve to demonstrate either that a term of 14 years as contemplated in this case by the learned sentencing Judge (without having regard to the pleas of guilty) would have been manifestly excessive, or critically, that the resulting sentence imposed of 10 years imprisonment was manifestly excessive. The effective sentence determined by his Honour appears to be in general keeping with the sentences imposed in the other cases to which we have been referred, including Greenburg, when regard is had as far as possible to the differing circumstances relevant to sentence in each of those cases.

37 It is submitted that his Honour fell into error in respect of the mental health of the applicant. In the course of the sentencing remarks, in the context of considering matters to the credit of the applicant, his Honour said:

"Matters of health are pointed out to me by counsel for the accused and are the subject of medical reports filed, but I simply cannot see that these matters have anything more than the most marginal relevance to the offender's situation at this time or, put another way, nothing more than the most marginal relevance as to his culpability and the penalties that have to be imposed today."

It is submitted that his Honour simply dismissed the applicant's mental health as disclosed in a report of Dr D Tannenbaum dated 10 August 2000. The failure to see as potentially relevant and worthy of consideration issues raised as to the mental health of the appellant is advanced as revealing error of principle. I do not understand his Honour's reasons to indicate this at all. What his Honour said in the passage quoted, in my view, indicates a conclusion by his Honour, after considering the medical report, that what was advanced was only of marginal relevance to culpability for the offences charged and to the determination of appropriate penalties. I am not persuaded that his Honour failed to consider at all what was revealed by the medical report.

38 It is further submitted that his Honour ought to have been satisfied by virtue of the report of Dr Tannenbaum that the mental condition of the applicant at the time of the commission of the offences was such as to significantly diminish his culpability. In turn, it is contended that this ought to have diminished the relevance of general deterrence, if not negated any relevance of general deterrence, in the determination of penalties by his Honour.

39 In R v Engert (1995) 84 A Crim R 67 the New South Wales Court of Criminal Appeal considered the relevance of mental disorder to the factor of general deterrence in sentencing. At 68 Gleeson CJ (as he then was) commenced his consideration of these issues by noting that general deterrence was but one of the purposes of criminal punishment, they being protection of society, deterrence of the offender and of others who might be tempted to offend, retribution and reform (Veen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 476). His Honour then observed:

"A moment's consideration will show that the interplay of the considerations relevant to sentencing may be complex and on occasion even intricate. In the given case, facts which point in one direction in relation to one of the considerations to be taken into account may point in a different direction in relation to some other consideration ...

It is therefore erroneous in principle to approach the law of sentencing as though automatic consequences follow from the presence or absence of particular factual circumstances. In every case, what is called for is the making of a discretionary decision in the light of the circumstances of the individual case, and in the light of the purposes to be served by the sentencing exercise."

In that case that the applicant suffered from schizophrenia. His Honour went on to say at 70 - 71:

"The circumstance that an offender suffers from a mental disorder may well be of considerable relevance in a number of respects to the sentencing task. One of those respects depending upon the facts and circumstances of the individual case, may relate to the matter referred to by this Court in the case of Scognamiglio (1991) 56 A Crim R 81. At 86 the passage in a judgment of the then Chief Justice of Victoria was cited with approval. That passage was in the following terms:

'In sentencing generally, it is necessary to balance personal and general deterrence on the one hand with rehabilitation on the other, but in the case of an offender suffering from a mental disorder or abnormality, general deterrence is a factor which should often be given little weight.

...

General deterrence should often be given very little weight in the case of an offender suffering from a mental disorder. Or abnormality because such an offender is not an appropriate medium for making an example to others.'

Similarly, in Letteri (unreported, Court of Criminal Appeal, NSW, 18 March 1992) Badgery-Parker J said:

'The principle then is clear enough. It is correctly stated as follows; that whereas general deterrence is a relevant consideration in every sentencing exercise, it is a consideration to which less weight should be given in the case of an offender suffering from a mental disorder or severe intellectual handicap. In an extreme case, the proper application of this principle may produce the result that considerations of general deterrence are totally outweighed by other factors. In every case it is a matter of balancing the relevant factors in a manner no different from that which is involved in every sentencing exercise.'

I emphasise the concluding sentence in that passage.

There has been some discussion in later cases as to whether what is described as the 'principle' mentioned above only applies in cases where the mental disorder is causally related to the commission of the criminal offence. ...

In truth however, for the reasons given at the commencement of this judgment, the question of the relationship, if any, between the mental disorder and the commission of the offence, goes to circumstances of the individual case to be taken into account in the application of the relevant principles. The existence of such a causal relationship in a particular case does not automatically produce the result that the offender will receive a lesser sentence, any more than the absence of such a causal connection produces the automatic result that an offender will not receive a lesser sentence in a particular case. For example, the existence of a causal connection between the mental disorder and the offence might reduce the importance of general deterrence, and increase the importance of particular deterrence or of the need to protect the public. By the same token, there may be a case in which there is an absence of connection between the mental disorder and the commission of the offence for which a person is being sentenced, but the mental disorder may be very important to considerations of rehabilitation, or the need for treatment outside the prison system."

40 The relevant report is that of Dr Tannenbaum mentioned earlier. Dr Tannenbaum first saw the applicant after the dramatic events of the collapse of his business and the public outcry that followed. The report provides an insight into the applicant's disturbed emotional and mental processes at that time of crisis and over the months that followed. The doctor also attempts by deduction to offer views as to the applicant's condition over the preceding years. The views he offers are vague as to time and, naturally, are dependant on what the doctor had been able to glean as to the applicant's personal and medical history. The doctor does not offer any view as to the effect on the applicant's condition, during the period of the offences, of the knowledge of the applicant of his deepening financial problems, and then of the ongoing and expanding ambit of the illegality to which he had resorted, and the ever-growing complexity of the sham arrangements he had established and needed to maintain to prolong his business activities and his income. In outlining his opinion Dr Tannenbaum said:

"The major issues that relate to Mr Grubb from a psychiatric viewpoint includes alcoholism, probably developing around the age of 19 in a man who had had an enormously disrupted childhood, but despite this he developed a very powerful work ethic. ... Following formal diagnosis of his depression no overt difficulties arose until the prescription of dexamphetamine that may have led to a constellation of behaviours that moved him into a realm of poor judgment, inappropriate spending and substantially erratic behaviour. This included very high levels of alcohol abuse. Mr Grubb's presentation within the hospital situation confirmed his significantly abnormal function related to his state on entry. Subsequently his demeanour and behaviour have moved within the normal spectrum while on anti-depressant treatment and without the negative contribution of alcohol.

... Certainly Mr Grubb has shown evidence of a major depression and alcoholism but it does appear that the contribution of dexamphetamine was in itself very substantially disruptive and led to significant problems in itself. The exact proportion of this and the degree of judgment deficit that may have been caused by this medication is difficult to establish but his behaviour seems to have been within the manic spectrum and he does seem to have had during that time substantial judgment and cognitive deficits with abnormal levels of impulsivity that he had not exhibited previously and has not shown since. Mr Grubb's difficulties were many and manifested in multiple directions in his life or at the same time." (emphasis added)

41 Two submissions appear to be advanced to this Court. First, that the cause of the appellant reverting to this criminal conduct was the prescription of dexamphetamine as the result of a mistaken diagnosis of attention deficit disorder. Secondly, by virtue of his mental condition at the time of the offences the applicant's moral culpability for the offences is greatly diminished so as to diminish or displace the relevance of general deterrence.

42 Dexamphetamine had been prescribed, as Dr Tannenbaum understood it, by another medical practitioner when an attention deficit disorder was suspected. The only indication of when this occurred is "several years ago", and that it preceded the applicant moving to Albany, which from other sentencing material would appear to be before 1995. At some unspecified time in 2000 Dr Tannenbaum formed the opinion there was no attention deficit disorder. The report indicates that this diagnosis was made possible only by virtue of the applicant's admission to hospital, the withdrawal of alcohol and other medication, and the treatment of an underlying depressive disorder. It is not suggested the earlier diagnosis of a possible attention deficit disorder was inappropriate in the circumstances at that time.

43 The report does not provide any indication of the relevant properties of dexamphetamine or its potential behavioural effects. The capacity of its potential effects to be affected by the other problems of the applicant, ie alcoholism involving very high levels of alcohol abuse, ongoing depression and the other unspecified "difficulties", seems to be implicit in the report, but remains unexplored. Nothing is offered by way of explanation of the apparent circumstance that while dexamphetamine seems to have been first prescribed before 1995, the offending behaviour was between October 1997 and March 1999. Even it be assumed that dexamphetamine was taken by the applicant during the period the subject of these offences, a matter which is left to inference, a fair reading of the report would suggest that at most a combination of very high levels of alcohol abuse and depression, each of which were of very long standing and had significant effects on the applicant, together with the dexamphetamine, produced substantial judgement and cognitive deficits with abnormal levels of impulsivity. Just what was the degree to which dexamphetamine may have contributed to that situation is unspecified and acknowledged by the doctor as difficult to establish. The report in this area is at best ambivalent. At one point it is said that "it does appear that the contribution of dexamphetamine was in itself very substantially disruptive", yet at another the doctor puts it no higher than that dexamphetamine "may have led to ...".

44 At all times, however, as I read the report, alcohol abuse and depression were persisting major factors. As the doctor concluded, the applicant's difficulties were "many and manifested in multiple directions in his life all at the same time". While it may be of some comfort to the applicant to suggest that a mistaken medical diagnosis led to the prescription of medication which caused him to offend, that is not a view which is adequately advanced or supported by the report of Dr Tannenbaum.

45 That does not diminish, however, the complexity of behavioural, emotional and mental difficulties which, in Dr Tannenbaum's opinion, the applicant experienced at some stage or stages, and which involved substantial judgement and cognitive deficits and abnormal levels of impulsivity. As Dr Tannenbaum put it, he may have moved "into a realm of poor judgement, inappropriate spending and substantially erratic behaviour". It is not clear when this may have first occurred. The material before the Court offers some support for the view, as was urged on us by counsel, that the applicant's move to Albany, which was associated with a rather exaggerated and very expensive interest in horse breeding, reflected these qualities. That was before 1995.

46 If the assumption be made that the applicant experienced these qualities at some stage during the period of the offences, and even if the further assumption be made that this was the position at all material times in respect of each of the 33 offences, neither of which assumption is directly supported by the report, this may well help to explain how the applicant came to be reduced to this criminal conduct. It is not suggested by the report, however, that the applicant was unaware of the nature of his conduct or was to any material degree so affected in his cognition that he did not appreciate the quality of his conduct and its consequences for the victims.

47 It must be born in mind that the offending conduct involved the applicant, over a period of one and a half years, repeatedly, skilfully, deliberately and systematically, practising deception at many levels so that he could misapply the money of very many people to further his financial machinations and, progressively, to cover up his previous wrongdoing. The very nature of his conduct, and its extent, offers scant support for the proposition that the applicant was so affected in his appreciation of the quality of his wrongdoing as to diminish his moral blameworthiness in any significant way; indeed it tells with some force against its acceptance. The report of Dr Tannenbaum does not overcome this. Further, what the report contemplates, at its best for the applicant, is a condition which appears to be different in nature and cause from the mental disorders or severe mental handicaps to which reference was made in the passages quoted from Letteri and Scognamiglio.

48 While this observation may involve what is more a matter of expression than substance, for my part I would respectfully suggest that the expression "the most marginal relevance" in the sentencing comments appears to reflect less than an adequate appreciation of the substance of the opinion of Dr Tannenbaum. Nevertheless, I too am not persuaded by the report that in this case the moral culpability of the applicant was significantly diminished, or that it would be inappropriate to attach considerable significance to the factor of general deterrence in the exercise of the sentencing discretion.

49 His Honour next considered the matter of the personal circumstances of the applicant. It was in this respect that his Honour cited a passage from the decision of this Court in Greenburg and acted on it. That passage is to be found at p 400 of the report where it was said:

"It is the type of case where the previous good character and personal mitigating factors should either be excluded from consideration or play only a minor role ..."

In expressing that view this Court was applying the view that had been offered in R G Fox & A Freiburg, Sentencing: State and Federal Law in Victoria (1985), par 12.905, at p 558. However, in Ryan v The Queen (2001) 75 ALJR 815, [2001] HCA 21, a majority of the Court appear to have rejected the view that good character may be wholly displaced by the gravity of the offending conduct. One of the majority, McHugh J, said at [33]:

"Sentencing is not a mathematical process. Various factors have to be weighed. The otherwise good character of the prisoner is one of them. It is a mitigating factor that the sentencing judge is bound to consider. But the nature and circumstances of the offences for which he or she is being sentenced is a countervailing factor of the utmost importance. The nature of the offences for which the appellant was being sentenced meant that his otherwise good character could only be a small factor to be weighed in the sentencing process."

At [100] Kirby J, another of the majority, expressed the view that the statement by the sentencing Judge "that the appellant's unblemished character and reputation did not entitle him 'to any leniency whatsoever'" amounted to a specific sentencing error. It was his Honour's view at [102] that the offender was entitled to have his good character, otherwise than in relation to the facts proved or inherent in his convictions, given appropriate weight. (my emphasis).

50 In view of this decision, which was of course delivered many months after the applicant was sentenced in this case, it is now to be accepted that as a matter of sentencing principle previous good character and personal mitigating factors may not properly be entirely excluded from consideration in any case. To the extent that the passage quoted above from Greenburg suggested the contrary it should not be followed. There will be cases, nevertheless, in which previous good character and personal mitigating factors, having been duly weighed, will properly play only a minor role. In this respect but only to this extent the passage quoted from Greenburg may have some continuing validity. It is to be noted, however, that it is not by virtue of any rule or principle that personal mitigating factors should play only a minor role. The extent to which personal mitigating factors will influence the sentence imposed in a particular case will depend inter alia on the strength of those factors and the other circumstances, including the nature and circumstances of the offences. What is required is an evaluation of all the circumstances of the individual case in light of the purposes to be served by sentencing, in the manner indicated by Gleeson CJ in Engert (supra).

51 Apart from the matters expressly identified by his Honour that told in the applicant's favour, there was not a great deal in his previous character and personal circumstances, however, that had any significant force in mitigation of penalty. The applicant was born in 1943 in Tasmania, being the older of two children. He completed his initial education at the age of 16 and appears to have followed agricultural pursuits until moving to Western Australia in 1968 to marry his present wife. In this State, within a relatively short time, he established his own business as a real estate and finance broker having completed the necessary educational requirements to be licensed in that capacity. It is accepted on all fronts that he applied himself very well to his business, which was financially successful although apparently poorly conducted. Within the five years or so preceding the offending conduct it grew significantly. He had a very broad level of investor support. This is to his general credit although it is to be noted that the reputation which he was able to establish and maintain, even during the period of his offending behaviour, was the means relied on by the applicant to attract new investors so as to sustain the business despite his internal depredations in the affairs of the business.

52 Apart from driving offences, including driving with an excessive level of alcohol, in 1987 and 1988 he was dealt with for two offences of fraud in the Court of Petty Sessions. One resulted in a dismissal under the then first offenders' provision and the other led to a conviction, but without penalty. It is to be accepted from this that the offences were minor and may properly be disregarded. Despite his very long standing problems of alcohol abuse and depression, his wife remains supportive and expressed her support in a letter to the trial Judge. From another reference it is apparent that he was active in the affairs of his local church. Two investors wrote references speaking of qualities they had found in the applicant which they saw to be commendable.

53 Putting aside the clear relevance of the applicant's co-operation and early pleas of guilty and their associated remorse, because they were expressly reflected in the sentencing process, it is fair to say that the remaining personal circumstances and previous character of the applicant are of only limited relevance and weight having regard to the nature and circumstances of the applicant's conduct, the need to protect society from conduct of this type, and in particular in this State in current times the need to deter others from similar conduct. Had the learned sentencing Judge dealt fully with the applicant's past character and personal circumstances in the course of his sentencing remarks, it is not apparent that he would have come to a different sentence.

54 In this case, however, his Honour appears to have placed some reliance at least on the passage he quoted from Greenburg in the exercise of the sentencing discretion. At the time of sentencing Greenburg was an authority which was binding on his Honour. Since then, however, the decision in Ryan v The Queen has identified error of principle in the relevant passage in Greenburg. As this error of principle may well have led to a failure to weigh adequately and in proper context the past character and personal circumstances of the applicant, it is appropriate that I consider afresh the exercise of the sentencing discretion in this case. I do so on the basis that the initial terms of 4 and 6 years imprisonment for the two categories of offences are maintained. The circumstances of these offences have been detailed earlier. In each case they were conscious and deliberate acts of theft, being part of a system of repetitive fraud by which the applicant misappropriated moneys entrusted to him to whatever purpose then most suited the personal or other needs or financial machinations of the applicant. The amount of money in total was quite enormous. There could not have been any genuine prospect of repayment. The applicant used and relied on the public reputation that he had established for honesty and trustworthiness to continue to attract investors, from whom he took and misapplied their money, often to cover up past wrongdoing so that he could continue this fraudulent process. The ongoing breach of trust is of very grave significance.

55 The consequences to the victims has proved in many cases to be devastating. Many were retired and have lost effectively their life savings. For the most part there is scant prospect indeed of the recovery of any part of the money invested or of the interest which is due. The 33 representative counts extend over a prolonged period of 18 months and involve individual sums totalling $5,205,481. These vary from between the $800,000 the subject of count 1 to $5,000 the subject of count 12. Many counts involve hundreds of thousands of dollars. Not only was all of this achieved by fraud and deceit, often ongoing as the applicant dealt with enquiries from those who had invested money, but the effects have been dramatically magnified by the systematic failure to maintain adequate records.

56 Given the nature and circumstances of the offences, their number, the period over which they were committed, and the vast amount of money stolen, and the consequences for the victims, the view is compelling that a very substantial term of imprisonment would normally be the appropriate penalty. In the language of the High Court in Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465, the protection of society, the deterrence of others who might be tempted to offend and retribution are factors of particular significance. Of these, the protection of society and the deterrence of others are particularly compelling. In reaching that view, the genuine remorse demonstrated by the applicant, in particular in his ready co-operation with the investigating authorities and the public enquiry, his willingness to assist in attempts to untangle the recording and accounting mess he had created, his early pleas of guilty and the part which his emotional and mental state may have played in the development of this fraudulent intrigue, are sufficient to encourage the view that the applicant may have learnt his lesson and is unlikely to offend again in this way, notwithstanding the clear danger that he may again succumb to alcoholism and depression. Reform and personal deterrence may therefore be regarded as of lesser significance in this case.

57 While recognising that there are cases in which mental disorder may warrant attaching less weight to general deterrence, for the reasons given earlier I am not persuaded by what is before the Court that the mental condition of the applicant, at the time of the offences or at the time of sentencing, should weigh with significant force in this respect. That report is, however, more compelling in respect of the issues of personal deterrence and reform as indicated above. I would also have regard to the lack of relevant convictions of any significance and his capacity for hard work which had enabled him to establish himself with apparent success in society and to gain the respect of many people. He has the ongoing support of his wife and, it seems, his adult children. I also would take into account the very public nature of the disgrace which he has experienced by virtue of his criminal conduct, the collapse of his business, and what appears to be the loss of his own assets.

58 The nature and seriousness of these offences is so grave, in my view, that in the application of the totality principle a total sentence in the order of 15 to 16 years imprisonment would be justified. Such a term is not out of keeping with sentences that are reasonably comparative, as noted earlier. A significant deduction from this is warranted, in particular, in respect of the applicant's early pleas of guilty, his co-operation and the genuine remorse which is evident. There should also be some more modest allowance in respect of the other matters that tell in his favour which have been canvassed above. In my view, those matters together would be appropriately recognised by a deduction from a sentence of some 15 to 16 years to a sentence in the order of 10 years, with parole eligibility. In my view, this would appropriately reflect the considerable gravity of the conduct of the applicant and its consequences for others whilst giving appropriate recognition in his favour to the various matters which have been identified and discussed. Such a sentence appears to be well in keeping, after appropriate allowances, with what can be gleaned from the general pattern of sentences that are in some way comparative.

59 I would add that, in my view, a term in the order of 7 to 8 years imprisonment, which was pressed upon us for the applicant, would appear to be outside an appropriate sentencing range in this case. It would fail to accord sufficient and appropriate recognition to the gravity of the applicant's wrongdoing, the harm he caused, the need to protect society and general deterrence. It would also be out of keeping with the general pattern of relevant comparative sentences.

60 For these reasons I would grant the applicant leave to appeal but I would not disturb the sentences imposed and the effective total term of 10 years imprisonment, with parole eligibility. The appeal is dismissed.

Grubb v The Queen [2002] WASCA 158

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Judgment (108 paragraphs)

Grubb v The Queen [2002] WASCA 158 (17 June 2002)

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Cases Cited (11)