Hyman v Regina

Pearce v The Queen (1998) 194 CLR 610 CASES CITED: R v Dowd [2005] NSWCCA 113 at [40]-[41] R v Hommoud (2000) 118 A Crim R 66 at 67-68 R v Simpson (2001) 53 NSWLR 704

PARTIES: Judy-Ann Hyman - Applicant Regina - Respondent

COUNSEL: David Carroll - Applicant W Dawe QC - Crown

SOLICITORS: Shiranica George, Lawyers S Kavanagh -Solicitor for Public Prosecutions - Crown

IN THE COURT OF CRIMINAL APPEAL 2007/0005

SULLY J BELL J HOEBEN J

Tuesday, 27 February 2007 Judy-Ann HYMAN v REGINA

JUDGMENT 1 SULLY J: I agree with Hoeben J. 2 BELL J: I agree with Hoeben J. 3 HOEBEN J: On 23 June 2006 the applicant was sentenced by Puckeridge DCJ in relation to a large number of offences of dishonesty. The applicant had pleaded guilty to the offences and they were dealt with in two groups. The first group consisted of nine offences of make a false instrument contrary to s300(1) of the Crimes Act 1900 and nine offences of use a false instrument contrary to s300(2) of the Crimes Act 1900 (maximum penalty for each offence imprisonment for 10 years). His Honour was asked to take into account a further fifty matters on a Form 1. Of those matters forty eight were offences of making or using a false instrument and two were offences of obtaining financial advantage by deception. 4 The second group of offences consisted of two offences of obtaining a financial advantage by deception contrary to s178BA of the Crimes Act 1900 (maximum penalty imprisonment for 5 years). His Honour was asked to take into account another five offences of obtaining financial advantage by deception on a Form 1. 5 In relation to the first group of offences, his Honour took into account the Form 1 matters when sentencing for two offences described as sequence numbers 5 and 6. For those matters his Honour sentenced the applicant to imprisonment for 5 years and 3 months to commence on 15 June 2006 and to expire on 14 September 2011. His Honour set a non-parole period of 3 years and 9 months to expire on 14 March 2010. His Honour imposed the same sentence for the remaining offences in the first group. The sentences were to be served concurrently. 6 In relation to the second group of offences, his Honour took into account the Form 1 matters in respect of the offence described as sequence number 76 and imposed a sentence of imprisonment for 3 years and 6 months to commence on 15 June 2006 and to expire on 14 December 2009. His Honour set a non-parole period of 2 years to commence on 15 June 2006 and to expire on 14 June 2008. For the other offence in the second group his Honour imposed the same sentence. Those sentences were to be served concurrently. 7 The effect of the sentences passed by his Honour was a non-parole period of 3 years and 9 months to commence on 15 June 2006 and to expire on 14 March 2010 with a balance of term of 1 year and 6 months to expire on 14 September 2011. All sentences were to be served concurrently.

Factual background 8 The applicant was born on 27 July 1961. On 11 February1997 she began working in the Sydney office of American Express International Incorporated (Amex) as the Executive Assistant to the Senior Vice President of the Global Corporate Services Department. In 2000 the applicant was issued with a company Corporate Credit Card. Before the issue of this card the applicant had used the Senior Vice President's Corporate Card for business expenses. When she was given her own card, she was informed of the company's policy that the card was to be used for business purposes only and that receipts for all expenditure were to be submitted with any claim. She agreed to be bound by that policy. 9 Each month Amex issued a statement for the expenses incurred on her Corporate Card and she understood that, in accordance with company policy, she was required to complete a Travel Expense Voucher (TEV) in respect of business related expenditure and submit it, together with the relevant receipts, to the Vice President for approval. 10 The procedure was for the Vice President to then review the expenditure on the card, approve it by signing the TEV and to allocate a generic authorisation number to the document, authorising the payments made by the applicant as business expenses. The document was then faxed to a processing unit in India and filed there. This procedure was designed to ensure that no personal transactions were made by employees who used Corporate Cards. Each TEV was allocated to an accountable number at the time of creation, so as to enable it to be identified and linked to a specific Corporate Card Statement. 11 Between the date of issue of the card and the date of her arrest, the applicant spent large amounts on purchases of personal items such as clothing, jewellery, a mobile phone, mobile telephone calls, taxi fares, duty free shopping, sporting goods, photographic equipment, computer equipment, flowers, sporting event tickets, show tickets, restaurants including interstate locations, fuel, leather goods, clothing, luggage, pharmaceutical goods, accommodation, car hire, groceries including gourmet food and liquor, together with various other goods and services. Money was also spent on accommodation at five star hotels in Sydney, interstate and overseas. The applicant purchased airline tickets for herself and her husband and paid for travel expenses and goods and services while overseas. 12 The method employed by the applicant was to claim as valid business expenses on the TEV for the relevant periods, money she had spent on personal items and services. She also created fictitious payments and expenses so as to disguise other personal expenditure which she had incurred on her Corporate Card, which was not the subject of a claim on a TEV. Although this expenditure could not be identified by examining the fraudulent TEVs, it could be identified on the Corporate Card Statements. The applicant then signed the TEV, forged the signature of the Vice President, to whom she reported at the time, and affixed his personal payment authorisation number on the TEV. On some occasions she also forged his initials beside a number of entries on the document. This indicated to the Processing Unit that receipts for those items were either not available or that the Vice President had authorised those payments. This was not the case as the initials had been forged. She would then send a copy of the document to the Processing Unit in India. 13 By forging the signature of the Vice President and using his payment authorisation number, she was able to bypass the Sydney office thereby eliminating the prospect of the discovery of her fraudulent conduct at that location. As a result staff at the American Express Processing Unit in India did not question her TEV submissions, even where receipts were missing or never received, because to the best of their knowledge, the TEV claim had been authorised by the Amex Senior Vice President. 14 Amex has been unable to find any TEVs for legitimately incurred business expenses which were submitted by the applicant between the date of her being issued with the Corporate Credit card in 2000 and the date of her arrest in March 2005. An analysis of the TEVs which were submitted revealed that the applicant did not submit a TEV for every monthly statement issued in respect of the Corporate Card. 15 A comparison of the TEVs with the monthly bank statements showed that, in most cases, one TEV covered several bank statements. By completing one TEV for several statements, the applicant was able to obtain the following benefits:

(a) The statements in respect of which no TEV was submitted, were overlooked by the bureau in India because of the sporadic manner in which she submitted claims.

(b) By deliberately delaying the submission of the TEVs, she was able to better disguise the unauthorised debts incurred by her spending on personal items.

(c) The delayed submission of claims attracted "overdue payment" charges on the credit card. Company policy required that employees pay such charges. The applicant submitted these late claims with a request that they be dealt with urgently so that she would not attract a "late payment" fee.

The reality was that the applicant never paid any of the "late payment" fees. Instead she passed them off as valid business expenses on the various TEVs which she did submit. 16 The real purpose of the delayed submissions was that in processing the claims urgently the Amex Processing Unit in India would have neither the time nor opportunity to audit the validity of the fraudulent TEV claims, or to investigate the absence of receipts. The scheme was very successful. The applicant was able to continue the pattern of fraudulent and personal spending on her Corporate Credit card for many years, escaping detection and avoiding being called upon to answer for her conduct. 17 In civil proceedings against the applicant, Amex accepted that of the $498,327.34 claimed by the applicant on the fraudulent TEVs, it could not prove that $253,939.28 was not for a business purpose. For the purpose of settlement, Amex accepted as valid, TEV entries which by their description, appeared to be for business expenses but for which there were no receipts. The civil proceedings brought by Amex were settled by the applicant paying $220,000. This amount was raised by the applicant's husband refinancing the mortgage on the family home. 18 The applicant's fraudulent conduct only came to light after she used the Vice President's Corporate Credit card on 1 December 2004 to purchase return first class airfares to Singapore for herself and her husband. It seems that the personal expenditure on her own Corporate Card had become so large that she was having difficulty making up expenses to hide her fraudulent spending patterns. 19 On 15 March 2005 the applicant attended Surry Hills Police Station by appointment in company with her solicitor. She was placed under arrest, cautioned and escorted to the custody room. At that time she declined to be interviewed. Two days later on 17 March 2005 she attended the Surry Hills Police Station and surrendered some of the items she had fraudulently purchased. These items included a laptop computer and attachments, ladies' clothing, ladies' shoes, luggage, sunglasses and jewellery. 20 Counsel for the applicant prepared a schedule which set out the total amount which had been included on fraudulent TEVs at $519,435. Of that amount the applicant had identified $94,979 as that which she had applied for her personal use. Included in the first figure was an amount of $174,313 which related to false TEVs, but it was not known and the applicant did not admit, whether she had received any of that amount. This differentiation between personal expenditure and business expenditure depended entirely upon the statements of the applicant. 21 The amount involved in the second group of offences, ie dishonestly obtain benefit by deception, was $186,786. The applicant admitted that the whole of that amount had involved unapproved personal expenditure by her. 22 The Court was advised that on 5 April 1995 the applicant had been convicted of two counts of larceny and seventy six counts of obtaining a benefit by deception. The total amount involved was $22,550. The offences related to the misuse by the applicant of her then employer's Westpac handy card. On each count she received a bond and a community service order of one hundred hours.

Remarks on sentence 23 His Honour noted that he was required to take into account the amount of money involved and the period of time over which the offences were committed when assessing the extent of the criminality involved. His Honour characterised the offences as serious because they involved a clear breach of trust by the applicant, forgery and planning. 24 The applicant gave evidence in the sentencing proceedings. His Honour accepted that the applicant had a gambling addiction which had been present in 1994-1995 when she had been convicted of the earlier offences and despite her attempts to overcome the problem, that addiction had continued. His Honour accepted that the gambling addiction did not excuse the applicant's conduct but it did provide some explanation for it. His Honour accepted that the applicant was genuinely remorseful for her conduct and also had regard to the fact that Amex had accepted $220,000 in full settlement of its claims against the applicant. 25 His Honour found that the plea of guilty had considerable utilitarian value and that the applicant was entitled to a discount of twenty five percent in that regard. 26 His Honour found special circumstances in that the applicant was seeking professional help to deal with her gambling addiction and that the prognosis was good if she continued receiving that assistance. This was confirmed by a report of Dr Jacobs, the applicant's treating psychiatrist, who considered that there was a strong chance that she would not re-offend if she maintained her current therapy. His Honour took those special circumstances into account when fixing the non-parole period but also noted that the non-parole period had to reflect the seriousness of the offences. 27 His Honour gave no reason why the sentences should be served concurrently, nor did his Honour offer any reason why he passed the same sentence in relation to all of the offences in the first group.

The appeal Ground 1: His Honour erred in failing to properly consider the objective and subjective (and aggravating and mitigating) circumstances of the offences. 28 It was submitted that his Honour had not referred specifically to s21A of the Crimes (Sentencing Procedure) Act 1999 when sentencing for the first group of offences and generally had paid too much attention to the aggravating features of the applicant's offences to the detriment of the applicant's subjective case. It was submitted that his Honour had not given sufficient weight to the rehabilitation already undertaken by the applicant and her good prospects of further rehabilitation. There had been double counting of aggravating features when his Honour referred to forgery and the repetitious nature of the offences over a long period of time. It was submitted that when his Honour referred to s21A when sentencing for the second group of offences, his Honour was not specific as to what factors he took into account. 29 It is true that his Honour did not refer specifically to the aggravating and mitigating factors in s21A. Had he done so, the result would not have favoured the applicant. The applicant not only had a record of previous convictions but convictions involving breaches of trust similar to that associated with these offences (s21A(2)(d)). The applicant had abused a position of trust (s21A(2)(k)). Significantly the offences were part of a planned criminal activity (s21A(2)(n). By way of mitigation it could be said that the applicant was unlikely to re-offend (s21A(3)(g)), had good prospects of rehabilitation (s21A(3)(h)) and had shown remorse for the offences by making reparation (s21A(3)(i)). There was also the applicant's plea of guilty (s21A(3)(k)). 30 Even though his Honour did not refer specifically to those subsections, his Honour did take into account and specifically refer to all of those factors. The weight which his Honour gave to those factors was a discretionary matter for him. 31 There was no double counting of aggravating features. This kind of forgery is not an element of the offence of making a false instrument. His Honour was entitled to take into account the lengthy period of time over which the offences were committed, together with the sheer number of offences when assessing their objective criminality. No error has been revealed in his Honour's approach to the aggravating and mitigating features of these offences.

Ground 2: His Honour erred in the application of his finding of special circumstances. 32 The applicant's submissions were directed at the sentence passed in respect of the first group of offences. It was submitted that despite finding special circumstances, when his Honour fixed the non-parole period of 3 years and 9 months the only variation to the statutory ratio provided for by s44(2) of the Crimes (Sentencing Procedure) Act 1999 was a reduction of two months. This, it was submitted, failed to adequately have regard to the finding of special circumstances which required a significant reduction in the non-parole period. 33 The overriding requirement for his Honour was to pass sentences which were appropriate to the offences. Specific and general deterrence were significant considerations when sentencing for these offences. For his Honour to have fixed a non-parole period less than that which he did would not have adequately reflected the criminality involved. This is particularly so when one has regard to Pearce v The Queen (1998) 194 CLR 610 and the matters set out in relation to grounds of appeal 3 and 4. In any event his Honour did give effect to his finding of special circumstances, albeit in a relatively minor way. This involved an exercise of discretion by his Honour and error in that exercise has not been demonstrated.

Ground 3: His Honour erred in the application of the totality principle. Ground 4: His Honour erred in taking account of offences on the Form 1. 34 It was submitted on behalf of the applicant that his Honour's approach of "selecting a sentence appropriate to the overall criminality and imposing that sentence in respect of all or most of the charges" was contrary to what the High Court said should be done in Pearce. Such an approach to sentencing had been disapproved by Simpson J in R v Hommoud (2000) 118 A Crim R 66 at 67-68. It was submitted that his Honour had taken a global approach to sentencing and had not considered the criminality involved in each offence. This had caused an injustice to the applicant because the criminality involved in each offence was not necessarily the same. The offences had occurred over several years involving varying amounts of money and different fraudulent conduct. 35 In relation to the way in which his Honour treated the Form 1 offences, the submissions on behalf of the applicant were directed primarily towards the first group of offences. It was submitted that his Honour had taken the Form 1 matters into account in relation to two rather than one offence. It was submitted that this error was made all the more obvious because his Honour had passed the same sentence in respect of the other offences in the first group even though the Form 1 matters were not to be taken into account in relation to those offences. The applicant relied upon R v Dowd [2005] NSWCCA 113 at [40]-[41]. 36 As the Crown properly conceded, his Honour did err in the way submitted. Guidance had been provided by Pearce as follows: "45 To an offender, the only relevant question may be "how long", and that may suggest that a sentencing judge or appellate court should have regard only to the total effective sentence that is to be or has been imposed on the offender. Such an approach is likely to mask error. A judge sentencing an offender for more than one offence must fix an appropriate sentence for each offence and then consider questions of cumulation or concurrence, as well, of course as questions of totality. 46 Sentencing is not a process that leads to a single correct answer arrived at by some process admitting of mathematical precision. It is, then, all the more important that proper principle be applied throughout the process. 47 Questions of cumulation and concurrence may well be affected by particular statutory rules. If, in fixing the appropriate sentence for each offence, proper principle is not applied, orders made for cumulation or concurrence will be made on an imperfect foundation." 37 Even though error in his Honour's approach has been established, it is clear when one applies Pearce that the end result would not have favoured the applicant and must have resulted in a total sentence significantly greater than that which was passed by his Honour. This is readily illustrated by reference to the schedule of offences conveniently provided to the Court by counsel for the applicant. 38 The earliest offences in point of time to which the applicant pleaded guilty were sequences 39 and 40, which involved making and using a false instrument, ie a TEV on 14 August 2001. The amount involved was $6,930.29. Taking into account that this was the first in the series of offences and the amount of money involved, a sentence with a non-parole period of 1 year with a balance of term of 6 months would not be unreasonable.

The next two offences in point of time were sequences 27 and 28 of making and using a false instrument, ie a TEV. The offences took place on 7 May 2002 and the amount involved was $13,253.90. Applying the same principles, but keeping in mind that this was the second set of offences, a sentence with a non-parole period of 1 year and 3 months with a balance of term of 9 months would not be unreasonable.

The next offences in point of time were sequences 31 and 32 of making and using a false instrument, ie a TEV. The offences took place on 25 September 2002 and the amount involved was $17,544.07. Applying the same principles but taking into account the amount of money and that this was the third set of offences, a sentence of 1 year and 6 months with a balance of term of 1 year would not be unreasonable. 39 I do not propose to set out indicative sentences for all of the remaining matters in the first group of offences. What is clear from the proposed sentences above is that the applicant's escalating level of criminality would produce a gradual increase in the sentences to be imposed for each offence. 40 When the sentencing judge came to pass sentence for either the offence described as sequence 5 or the offence described as sequence 6 (offences relating to making and using a false instrument respectively, ie a TEV) the fifty matters on the Form 1 would have to be taken into account. Each offence took place on 6 April 2004 and the amount involved was $189,703.43. Each offence was number eight in point of time and occurred when the applicant had been engaging in this criminal activity for over three years. The sentence for whichever offence (either sequence 5 or sequence 6) took account of the Form 1 matters would have to be substantial. For the reasons given by his Honour and as set out in para [46 ] hereof, the sentence passed by his Honour of a non-parole period of 3 years and 9 months with a balance of term of 1 year and 6 months was appropriate for that offence. 41 If his Honour had followed Pearce he would have passed separate sentences for each of the offences in group one with a gradual increase in sentences culminating in the sentence for the offence which had regard to the Form 1 matters. It would have then been necessary for his Honour to consider questions of cumulation, concurrence and totality as specified in Pearce. Because each sequence of offences in that first group occurred at a different time, involved different amounts of money and involved a considerable amount of planning and preparation by way of forgery and timing the movement of TEVs to India, some element of cumulation in the sentences would have been inevitable. Even a small amount of cumulation would have resulted in a total sentence greater than that which was actually passed by his Honour. 42 Accordingly though clear error has been identified in his Honour's failure to follow the process mandated in Pearce, not only has the applicant not been disadvantaged by that error, she has positively benefited from it. Similarly, no detriment has been suffered by the applicant as a result of how his Honour used the Form 1 matters.

Ground 5 - The sentences are manifestly excessive. 43 It was submitted on behalf of the applicant that the sentences passed by his Honour were manifestly excessive because the starting point of imprisonment for 7 years was too high given that the maximum penalty for the s300(1) and (2) offences was 10 years imprisonment. The Court was provided with sentencing statistics which showed that the head sentence actually passed by his Honour was more severe than about ninety percent of similar cases in which a sentence of imprisonment had been imposed. The same submission was made in relation to the s178AB offences where the maximum penalty was 5 years imprisonment and his Honour had taken as his starting point 4 years and 6 months imprisonment. 44 It was submitted that these offences did not merit sentences of such severity because of the applicant's strong subjective case, her remorse and good prospects of rehabilitation and because the amounts of money although substantial were considerably less than some of the cases referred to in the statistics. It was submitted that the circumstances of these offences lacked such matters of aggravation as greed, abuse of an executive position or professional standing and misuse of money of a vulnerable individual. 45 As this Court has said on many occasions, sentencing statistics can be useful but their value is often limited. Each case depends upon its own facts. The statistics to which the Court was referred all involved first offenders, not the situation which arose here where the applicant had been found guilty on an earlier occasion of significant breaches of trust involving an employer. The cases referred to in the statistics did not involve wilful and persistent offending over a long period of time with an escalating level of criminality such as here. 46 While I agree that in relation to a number of the offences in the first group, the sentences passed by his Honour were manifestly excessive, that is not the situation in relation to the offence which took into account the fifty Form 1 matters, given the date when that offence occurred and the amount of money to which the false TEV related. When one adds to those considerations questions of personal and general deterrence, retribution and denunciation the sentence which his Honour passed in respect of that offence was not manifestly excessive.

Conclusion 47 For this Court to quash a sentence and impose a lesser one it is not sufficient for the applicant to establish error. It is necessary that this Court be satisfied that "some other sentence … is warranted in law and should have been passed" - subs6(3) of the Criminal Appeal Act 1912, R v Simpson (2001) 53 NSWLR 704 at [79] and [99-100]. 48 Although his Honour erred in failing to follow that which was mandated in Pearce, and although his Honour did err in taking into account the Form 1 matters when sentencing for the offences set out in sequences 5 and 6, these errors have not disadvantaged the applicant. For the reasons indicated had his Honour passed individual sentences for each offence, the end result would have been a greater total sentence of imprisonment for the applicant. In respect of the use of the Form 1 matters, I am not persuaded that the sentence passed by his Honour is excessive and that some other sentence is warranted in law and should have been passed had his Honour taken those matters into account when sentencing either for the offence described as sequence 5 or for the offence described as sequence 6. Given the aggravating features which his Honour identified, together with the objective seriousness of the offence and issues of general and specific deterrence, the sentence was within the appropriate range. 49 The orders which I propose are as follows:

(i) Leave to appeal is granted. (ii) The appeal is dismissed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.