Pfeiffer v R [2009] NSWCCA 145 | Case summary

FRIDAY 15 MAY 2009 PFEIFFER, John Clarence v R Judgment 1 McCLELLAN CJ at CL: The applicant was to be tried before a jury on one count of supplying goods and services without disclosing that he was an undischarged bankrupt contrary to s 269(1)(ad) of the Bankruptcy Act 1966 (Cth). On the 9th day of his trial he entered a plea of guilty. When sentenced an offence of seeking credit without disclosing his bankruptcy contrary to s 269(1)(a) of the Bankruptcy Act 1966 was taken into account on a Form 1. The maximum penalty for an offence contrary to s 269(1) is imprisonment for three years. 2 The applicant was sentenced to imprisonment for a term of two years and nine months, commencing 20 June 2008 and expiring 19 March 2012. Pursuant to s 20(1)(b) of the Crimes Act 1914, the sentencing judge ordered that he be released on 19 December 2009 having served 18 months in custody, upon the provision of security to the amount of $1,000 to be of good behaviour for three years. 3 The applicant submitted that the sentencing judge made a number of errors which have resulted in a sentence which is manifestly excessive. The errors are identified as a failure to take into account relevant subjective circumstances and an error in the approach taken to the applicant's previous good character and lack of criminal antecedents. 4 A document entitled Statement of Facts was tendered to the sentencing judge who adopted it. I adopt the applicant's summary of those facts which is in the following terms: "The applicant is a highly skilled antique furniture manufacturer, who operated through several entities including businesses registered in his name or in the name of his wife, Virginia Pfeiffer, or through companies of which she was the sole shareholder and director. The business name 'Cedar Grove Galleries' was registered in July 1997 and the proprietor was recorded as Virginia Pfeiffer. One year later, the entity was changed to 'VFP Nominees Pty Ltd', which had been registered two months earlier with Virginia Pfeiffer as director and secretary. In November 1998, 'There Back and Beyond Fishing and Adventure Tours' was registered as a business with 'VFP' as its proprietor. This entity appeared to be the proprietor of the furniture manufacturing business during the period of the applicant's bankruptcy (1/9/99-1/9/02). By mid-1997, the applicant was in considerable financial difficulty arising out of his personal exposure to the Commonwealth Bank. The applicant subsequently filed for bankruptcy on 1 September 1999. During the relevant period, the furniture business had two bank accounts with the National Australia Bank ('NAB'), in relation to which the applicant and his wife were the sole signatories. The applicant had a NAB credit card, which he used to make both personal and business related purchases. Payments were made on the card from funds transferred from the 'Cedar Grove Galleries' and 'There Back and Beyond' bank accounts. Mr Angel Elliott and Mrs Santina Elliott were the owners of a company called Tryden Pty Ltd which operated a hotel in Bexley. They arranged with the applicant and Virginia Pfeiffer to purchase custom made furniture for their new home in Centennial Park. The Elliotts dealt with the applicant in most of their dealings with Cedar Grove Galleries and gained the impression that he was the principal of that entity, even though he was neither the proprietor nor a director of Cedar Grove Galleries or There Back and Beyond. Between mid March 1999 and 19 February 2001, the Elliotts received and paid deposits on four quotes from the applicant and his wife. The first quote (15 March 1999) was provided prior to the applicant's bankruptcy and was for $27,820 under the letterhead 'J Pfeiffer for Cedar Grove Galleries - Pokolbin'. A deposit of $5,000 was paid by cheque, which was deposited into the Cedar Groves Galleries account in the name of VFP Nominees Pty Ltd. The remaining quotes and payments occurred after the bankruptcy. The second quote (5 October 1999) was from 'V Pfeiffer for Cedar Grove Galleries' and was in an amount of $63,710. A deposit of $25,500 was paid to VFP trading as There Back and Beyond Fishing and Adventure Tours. The applicant requested a progress payment of $26,000 which was paid to VFP into the There Back and Beyond account. The third quote (10 February 2000) was for $148,000 with the letterhead 'J Pfeiffer for Cedar Grove Galleries'. The Elliotts deposited $35,000 into the Cedar Grove Galleries account then a further $35,000 into the There Back and Beyond account. The fourth quote also had the 'J Pfeiffer for Cedar Grove Galleries' letterhead. Between about 17 March 2000 and 19 February 2001, the Elliotts paid or deposited a sum total of $228,000 into Cedar Grove Galleries and There Back and Beyond bank accounts. In about March 2001, the applicant requested a further payment of $8,500, which Mrs Elliott paid by cheque to There Back and Beyond. At the end of March 2001, the applicant asked the Elliotts if they could lend him some money to erect a polishing room, which he said was necessary to fulfil health and safety requirements. Accordingly, between 1 September 1999 and 29 March 2001, the applicant, being an undischarged bankrupt, did jointly with VFP obtain $368,000 from the Elliotts by promising to supply and install furniture and related services. The Elliotts became concerned in early 2002 and asked their solicitor, Mr Ryan, for advice. Mr Ryan carried out a bankruptcy search and informed the Elliotts that the applicant was an undischarged bankrupt. The Elliotts said that this was the first time they became aware of the applicant's bankruptcy and that the applicant had never told them he was an undischarged bankrupt. By this time, significant amounts of the furniture had been manufactured in a raw state but had not been delivered. The applicant attempted to carry on the business in his own name. In May 2002, he registered the business Cedar Grove Heritage Furniture and Design in his name, expecting his bankruptcy to be discharged on 2 September 2002. He continued to operate under this business name until 1 April 2003. In July 2002, the Elliotts arranged a meeting with the applicant, Virginia Pfeiffer and Mr Ryan. The applicant requested more money and expressed some frustration about the number of changes that had been made to the order. The applicant subsequently faxed a letter to Mr Ryan requesting money to enable him to complete the job. The letter was handwritten and signed by the applicant, with no Cedar Grove or VFP motifs. On 21 August 2003, the applicant was questioned before the Federal Court of Australia. He stated that he was an employee of VFP Nominees, a company registered to Virginia Pfeiffer prior to 2002, and that he had the capacity to draw cheques for the business and was a sole signatory. He stated that VFP Nominees carried out a job for Mrs Elliott with a value of approximately $500,000, which was the largest job the company had ever conducted, and that the applicant was responsible for all aspects of the job. The Elliotts received about 15% of the goods and services under the contract. Accordingly, they suffered a net loss of approximately $312,000. The facts of the offence under s 269(1)(a), which was taken into account in sentencing, were that on or about 13 March 2004 the applicant sought a loan from Mr Peter Venables and Mrs Kathleen Venables in the amount of $5,000 to enable him to build a sawmill. He stated that the loan would be for 3 months. The Venables lent the applicant $5,000 and were given a receipt marked 'being for deposit on sawmill at Yetman'. At no time during the relevant period did the applicant disclose to the Venables that he was an undischarged bankrupt. The loan was not repaid." 5 The applicant was born on 13 January 1943 and was aged 65 at the date of sentence. 6 According to the psychological report by Peter Stoker, the applicant had a reasonably happy childhood. His parents had been happily married until his father, a farmer and sawmiller, died of a heart attack in 1967 at 52 years of age. He had been very close to his father. The applicant has a brother, who is 10 years younger than him. The applicant's mother is 90 years old and continues to live independently. The applicant visits his mother when he can and maintains weekly telephone communication. The applicant considers that his mother was emotionally abusive, controlling and domineering. She was negative towards him and his brother, claiming they would never be successful, and chastised the applicant for developing too many "big ideas" at boarding school. Mr Stoker concluded in his report that the applicant's "somewhat emotionally abusive childhood would have had an adverse effect on his psychological development." The sentencing judge did not refer to this matter in his remarks on sentence. 7 According to the pre-sentence report, the applicant has been married 4 times. He has 3 adult sons from his first marriage, 1 adult son from his second marriage and 1 adult son from his third marriage. He is currently married to Virginia Pfeiffer. 8 The applicant attended Scots College at Warwick until grade 10. For 4 years, during the school holidays, he undertook training in furniture making. After he left school, the applicant completed an electrical apprenticeship over 5 years and TAFE courses in construction, management, drafting and quantity surveying. He has had an extensive work history. Before commencing full time furniture making in 1989, the applicant worked as a self-employed share farmer, stock sales engineer, furniture maker and in the electrical trade. Before the applicant's bankruptcy in 1999, he made and sold furniture through a number of entities, which were registered in his name, including Cedar Grove Antique (Designs), Cedar Grove Manufacturing and Cedar Grove Antiques International. He closed his business in 1997 due to health problems, which developed in 1995. 9 Virginia Pfeiffer set up her own gallery in 1997 and the business name Cedar Grove Galleries was registered in her name. The gallery showcased the applicant's work and the applicant continued to make furniture for the gallery. Ultimately this business failed in 2002. 10 The applicant is now in very bad health. He has several debilitating, embarrassing and painful conditions. For over 10 years, he has experienced shoulder pain, which has been increasing in intensity, and has now been diagnosed as osteoarthritis. He has developed bilateral Carpal Tunnel Syndrome, which is more pronounced in his left hand. The applicant also suffers, among other ailments, from prostatomegaly with bladder neck obstruction, a large renal cyst on his left kidney, gout and tears to the tendons of the rotator cuff. He had a melanoma removed from his temple in 2004, which needs further follow up medical attention. The applicant has also suffered from hearing loss for about 40 years and, since 2005, has experienced dizziness and loss of balance. 11 The applicant has a minor criminal history for offences committed between 25 and 30 years ago. He has three minor dishonesty offences in 1978, 1980 and 1983 which were dealt with summarily in the Queensland Magistrates Court by way of fine. He is otherwise a person of good character. 12 As I have indicated the applicant is suffering from seriously poor health. The consequence will inevitably be that his period of incarceration will impose greater hardship upon him than on a healthy person. The sentencing judge was mindful of the medical evidence and concluded that the applicant was likely to suffer hardship in jail. His response was a variation of the non-parole period. His Honour said: "I propose to slightly vary that proportion (60-66% of the head sentence) to the offender's benefit because I am satisfied that because of his age and particularly because of his medical conditions that he will suffer particular hardship while serving a full time custodial sentence. That hardship will also be increased by reason of the fact that this is the first time he has ever served a custodial sentence." 13 There was evidence before his Honour which could have justified a finding that Justice Health would be able to deal with the applicant's needs. The evidence was from Dr Sharp who is a general surgeon providing medical services to all New South Wales gaols. However, the doctor's report contained the following significant qualification: "His medical problems may be exacerbated if he were to go to jail, despite treatment given by doctors within the gaol system, mainly due to the delays in inmates seeing specialists (for example, there is up to a 3 to 6 months waiting time to see the surgeon at his clinic in Long Bay Gaol and up to 12 months to see an orthopaedic surgeon). 14 The catalogue of medical problems from which the applicant suffers indicates that he will require access to a variety of medical specialists during his time in custody. This was confirmed by Dr Smit, the applicant's treating doctor. Having regard to the evidence of both Dr Sharp and Dr Smit, although a finding that the prison system could deal with the problems was appropriate, the timeliness of the response to any particular health issue was doubtful. Apart from identifying the likely delay in obtaining appointments Dr Sharp recognised the difficulties in moving a prisoner from one facility to another where the required access to a medical specialist may be available The inevitable consequence must be a considerable risk that the applicant's health will be further compromised by his period of incarceration. 15 The difficulties which a prisoner will face due to his health are relevant to both the total sentence and the period of full time custody which a court will impose. Where the health problems of an individual offender are such that his or her life in prison will be more burdensome than for a healthy person it may be appropriate to reflect these considerations in a reduced sentence. See R v Miranda [2002] NSWCCA 89; (2002) 128 A Crim R 362. 16 In the present case although his Honour indicated that he would have regard to the applicant's health when considering the period of full time custody it is not apparent that he had regard to these matters when considering the term of the total sentence. Some of the applicant's problems require constant supervision and in some cases at the time of sentencing surgical intervention was probably necessary. These problems should have been reflected not only in a reduction in his period of full time custody but also in the length of his overall sentence. 17 Apart from the health issues there is a difficulty with the approach the sentencing judge took to the applicant's character and criminal history. The applicant does have a record of previous offences in respect of which his Honour concluded that they "should be given little if no weight". To my mind that finding was correct. However, notwithstanding that finding his Honour concluded that the offence "cannot be characterised as being out of character." The basis for this finding was the fact that the offence to which the applicant pleaded guilty was committed over a period of time and involved a number of occasions on which the applicant obtained money from the Elliotts. His Honour said of these matters: "The offence before me cannot be characterised as being out of character. This is because it can hardly be said that the commission of this offence by the offender over a lengthy period of time involving the repeated obtaining of monies from the Elliotts was an aberration. Further, it cannot be said that this offence was out of character as he committed a further similar offence on 13 March 2004 being the charge on the section 16AB document." 18 The applicant submitted, in my opinion correctly, that if his Honour concluded that the prior offences were stale and of no consequence then the appropriate conclusion was that the applicant was otherwise a person of good character. The applicant emphasised that in Ryan v The Queen (2001) 206 CLR 267 the High Court indicated that previous good character is a relevant mitigating factor in sentencing. When seeking to identify whether an offender is otherwise of good character the offence for which he or she is being sentenced is irrelevant (see McHugh J at 279). 19 In the present case the applicant points to the fact that the sentence which his Honour imposed was close to the maximum as an indication that his Honour has failed to appropriately consider the applicant's character when he was sentenced. The maximum penalty for the offence is three years imprisonment and his Honour imposed an overall sentence of 2 years and 9 months which is only 8% less than the maximum. His justification for a sentence of this severity is found in the passage from his Honour's remarks extracted in [17] above. 20 There is no doubt that the applicant's offence was serious. It had the consequence that the Elliotts lost a considerable sum of money in circumstances, where if they had known of the true financial position of the applicant, they would have been unlikely to have committed their funds to him. However, as I have indicated the applicant was entitled to be sentenced on the basis that he had not previously committed a similar offence. The offence for which he was sentenced could not be categorised as the worst class justifying a sentence which was almost the maximum which could be imposed. When the applicant's personal circumstances, in particular his seriously compromised health, are considered I am satisfied that the sentence imposed was excessive. 21 The applicant offended when he was endeavouring to provide the Elliotts with value in the form of handcrafted furniture. The reason for his failure to deliver are not apparent, although his health would be likely to have affected his capacity for work. His crime involved obtaining money from only one victim rather than multiple victims which may often be the case for this offence. His offending involved a single course of conduct which began prior to his bankruptcy. 22 It is difficult to discern from the available authorities the appropriate range of sentence for this offence. The matter is made even more difficult by the circumstances of the applicant's health. 23 The applicant referred the court to three decisions. In Storen v The Queen (1993) 115 FLR 210 a sentence of four years with a non-parole period of two years was imposed. The sentence was not disturbed on appeal. However, Storen involved 13 separate offences each carrying a maximum penalty of three years and multiple victims. The sentencing judge was also required to take into account "no less than 59" offences of dishonestly obtaining social security benefits. The offences took place over a period of three years. 24 In R v Halls & Halls [2002] NSWCCA 55; (2002) 127 A Crim R 209 the offending involved multiple offences and victims. Although only $90,000 was lost there were 9 offences each carrying a maximum penalty of three years. The main offender was sentenced to 15 months imprisonment and a recognisance release order (minimum term) of 10 months. On appeal, her husband, who played a lesser role, had his sentence reduced to 12 months with a minimum period of 9 months. 25 In Paragalli v R [2006] NSWCCA 87 an appeal against the severity of sentence comprising a total sentence of 2 years 6 months with a minimum custodial component of 18 months was dismissed. The total amount involved $300,000 and was concerned with four separate offences. There were a further 2 offences taken into account by the sentencing judge. In that case there was a discount for a plea of guilty and some assistance, the sentencing judge having indicated a "starting point" of five years. The offender had a significant criminal history which "included offences, and a number of them, of dishonesty of various kinds." 26 In my judgment because the applicant was to be sentenced for only one offence and having regard to the matter on the Form 1, but mindful of his lack of relevant criminal history and his serious health problems a non-parole period of 12 months was appropriate. To my mind the total term of imprisonment should be a period of two years. 27 The following orders should be made:

Pfeiffer v R

At a glance

Court

Decision date

Before

Source

Judgment (13 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (5)

Cited By (4)