Supreme Court of Victoria|1995-08-21|Before: Crown P, Applicant P, Tadgell JA, Callaway JA

R v Adam Krizmanic [1995] VSC 185; [1995] VICSC 185 (21 August 1995)

Criminal law - Theft - Deficiency in solicitor's trust account - Struck off roll of barristers and solicitors - Relatively small amounts - Repetition and breach of trust - Custodial sentence.

Public Prosecutions

Counsel for the Applicant P.F. Tehan

Solicitors for the Applicant Legal Aid Commission of Victoria

2. The learned sentencing judge made an order by consent that the applicant be struck off the roll of barristers and solicitors. On each of Counts 2 and 12 his Honour imposed a sentence of twelve months' imprisonment; on each of Counts 3, 5 and 7 a sentence of six months' imprisonment; and on each of Counts 1, 4, 6, 8, 9, 10 and 11 a sentence of three months' imprisonment. His Honour directed that six months of the sentence imposed on Count 2, two months of the sentences imposed on Counts 3 and 5 and two months less one day of the sentence imposed on Count 7 be served cumulatively with the sentence on Count 12, making a total effective sentence of two years less one day. His Honour directed that twelve months of the sentence be suspended for a period of two years.

3. The present application for leave to appeal against sentence is made on two grounds, the first being that the sentence was manifestly excessive and the second being epexegetical of the first: that is to say, in fixing the term of imprisonment to be served immediately, the learned sentencing judge erred in giving insufficient weight to the applicant's plea of guilty; to the extent of his cooperation with the investigation conducted by the Law Institute and with the police; to the delay between the offences coming to light and his being dealt with, together with the effects that that delay had on him; to the substantial progress that he had made towards rehabilitation; to the degree to which his rehabilitation was likely to be interfered with by imprisonment for the period fixed; and to the extent to which he had already been punished as a result of his sense of personal shame, the special nature of his disgrace within a close-knit ethnic community, his rejection by that community and by his parents, his bankruptcy and his disgrace in the fellowship of lawyers.

4. Those grounds did not allege, nor did counsel for the applicant submit, that his Honour failed to take any of those matters into account. The complaint was rather of the weight that was given to them.

5. The first eleven counts related to the period between April 1983 and October 1991. Counts 1, 4, 6, 8, 9, 10 and 11 concerned amounts of $2,000, $2,625, $5,000, $1,000, $2,000, $1,500 and $US9,000 respectively. They were relatively small amounts, but doubtless they were not unimportant to the people who reposed their trust in the applicant and whose trust was betrayed.

6. Count 2 related to a theft of $104,250 from Mr Stephen Bito. He had initially given the applicant $55,000 in cash and cheques in the belief that that sum would be invested in mortgages or otherwise on security. The applicant gave him a document headed "General Mortgage Investment Authority" which contained provisions instructing the applicant to advance the sum received from Mr Bito on security and at a rate of interest hot less than 20% per annum. Mr Bito thereafter entrusted a further twelve sums to the applicant between June 1987 and December 1991. Those twelve sums amounted to $49,250. Interest was allowed to accumulate. From time to time Mr Bito attended the applicant's office and updated the record that was said to be kept of the level of his investment including interest. As at the end of 1991 the total was supposedly $219,000. When he was questioned the applicant said that the initial sum of $55,000 was used "probably to pay back somebody else". He accepted that he had stolen that sum and that the other sums had been given to him for investment as Mr Bito claimed.

7. Count 3 related to $16,325 stolen from Ms Maria Reder. She had given the applicant five separate sums for investment between 1986 and 1990. The first sum was $13,000. The other sums were relatively small. She did so in the belief that her money would be invested in mortgages or otherwise on security. Like Mr Bito, who is her cousin, she allowed the interest to accumulate. She also was issued with a General Mortgage Investment Authority. The applicant admitted appropriating the initial sum to assist in the running of his practice. In respect of the balance, he said that he probably used it to pay somebody else to whom he owed money.

8. Count 5 concerned the theft of $60,000 from Mrs Ana Kozina. She and her husband had attended the applicant's office in May 1990 to ask him whether he could handle the investment of money on their behalf. He said that he could and assured them that their money would be safe. In December of that year they gave him three sums totalling $60,000 to be invested. A mortgage was prepared by the applicant and given to Mr and Mrs Kozina. The applicant admitted taking the $60,000 and that that money was probably used to repay another person to whom he was indebted. It may fairly be said that robbing Peter to pay Paul was part of the applicant's modus operandi. He admitted that he prepared the mortgage because the clients had asked for it but that he did not intend to register it on their behalf.

9. Count 7 concerned the estate of a testator called John Maxwell Herd. The applicant had been appointed sole executor, but he was removed from that office by order of the Supreme Court made on 25th March 1988 and the State Trust Corporation of Victoria was appointed administrator in his stead. The Supreme Court order made provision for the vesting of the estate assets and required the applicant to deliver all files, accounts and other records relating to the estate, together with a complete inventory of the assets and a full accounting of all receipts and expenditure. He did not comply with the order and, after the date of his removal from office, he misappropriated two amounts totalling $14,500 from the estate. The major beneficiary was Mr Robert Herd, in whom the property was laid in the relevant count on the presentment.

10. Count 12 was to the effect that on 23rd January 1992 the applicant had a deficiency of $384,520.66 in or payable into his trust account and had not given a sufficient and satisfactory explanation of that deficiency. The language of the count reflects the language of s.42(1) of the Legal Profession Practice Act 1958. The principal sums largely, though not entirely, overlapped with the amounts the subject of Counts 1 to 11.

11. Counsel for the applicant before us emphasised the frankness of the confession that the applicant had made and the period of well over three years that elapsed between that confession and sentence. The applicant had admitted his misdeeds on 23rd January 1992, but he was not interviewed by the Fraud Squad until 5th September 1994 and not sentenced until 19th May 1995. Counsel said, in effect, that during that period the prospect of punishment had hung over the applicant's head like the sword of Damocles and that his life had been "on hold". That was indeed the tenor of the evidence given by the young woman with whom he enjoys a supportive relationship, who said that all the applicant wanted in that period was to get the matter over and be able to get on with the rest of his life. She said, consistently with counsel's submission, that everything was "on hold", that everything was a matter of waiting.

12. It was also pointed out that the applicant had not wasted the period of delay but had taken active steps to rehabilitate himself. Evidence was called from two of his employers. I omit his brother, for whom he also did some work. one was a painter and decorator and another an electrical contractor. Both of them spoke well of the applicant. Counsel reminded us in this regard of what had been said by the Court of Criminal Appeal in R. v. Lavender (1972) 56 Cr App R 355 at p 358. Cairns LJ, delivering the judgment of the Court, referred to the fact that during the long period while the appellant was awaiting trial he obtained fresh employment and worked seriously and perfectly honestly. His Lordship said that the delay in bringing the matter to trial had led to the appellant's having it hanging over his head for something like four years and had quite rightly been prayed in aid on his behalf. See also R. v. Hughes (Full Court, unreported, 3rd May 1993) at p 7.

13. It is by no means true that all solicitors who are guilty of theft receive custodial sentences. See, for example, the judgment of Smith J in R. v. Gough (Full Court, unreported, 11th June 1993) at pp 16-17. Loss of one's profession as well as professional disgrace have often been considered relevant factors. The latter is relevant here. Undoubtedly the applicant has been disgraced. Loss of his profession may have less relevance. It is clear from the evidence that the applicant should never have been forced into choosing the law as a career and that he is likely to be a much happier and more useful member of society in some other walk of life, such as he had been pursuing prior to the sentence the subject of the present application.

14. There are, nevertheless, cases where a custodial sentence is appropriate. Cf. R. v. Bieske (Full Court, unreported, 18th March 1994). They are not confined to solicitors who steal large sums of money. Although every case must be considered separately on its own merits, repetition such as we see in the present case and breach of trust are themselves important factors to take into account.

15. The learned sentencing judge was conscious of the range of penalties that had been imposed on solicitors for offences of dishonesty. His Honour referred to the matter expressly and reminded himself of the need to avoid inconsistency.

16. Counsel emphasised, as his predecessor had done in the court below, the psychological dynamics of the applicant's family background and an oppressive upbringing leading to a choice of career to which, as I have said, he was plainly unsuited. Counsel reminded us that these offences had not been committed in order to maintain an extravagant lifestyle, nor had they been motivated by greed. They appear to have been activated, at least initially, by a desire to prove himself in the eyes of the community to which he belonged.

17. It seems clear that the applicant has suffered remorse of the kind to which Mr Healey, a psychologist, gave testimony in his report. The applicant has been rejected by most of his family, and it was submitted that even before his confession he would have suffered the pangs of quilt. His recourse to heavy drinking during the period of the thefts was said to be outward and visible evidence of that.

18. A court must not impose a sentence that is more severe than is necessary to achieve the purposes for which the sentence is imposed. I would accept that special deterrence is of very limited, if any, weight in the present case but that is not the only purpose of punishment. The sentencing judge is also concerned to punish an offender to an extent and in a manner that is just, to deter others from committing offences of the same or a similar character and to manifest the denunciation by the court of the type of conduct in which the offender engaged. It was submitted that general deterrence is of diminished effect when there is a long delay between the facts coming to light and the imposition of sentence. It is true that speed of detection is a major factor in deterrence. It is much less clear that the unfortunate delay between 1992 and 1995 would have much effect on the general deterrent value of the sentence that his Honour imposed.

19. It is always important in a civilised society that righteous indignation should not overtake a just sentencing process, but the purpose of denunciation can rarely be wholly absent where a solicitor commits offences of this kind. As Young CJ said, in a judgment with which the other members of the Court agreed, in Director of Public Prosecutions v. Ryan (Full Court, unreported, 7th April 1986) at p 6:

"(A) solicitor is in a special position. He is not only in a

position of trust but he is held out by the Court as a person

of skill and ability and as a person who can be trusted. That

is the consequence of his admission to practise as a barrister

and solicitor of the Court. Such a person must, in my view,

inevitably suffer severe punishment for offences which

demonstrate that he is not to be trusted. Offences which

demonstrate that a solicitor is not to be trusted bring the

whole profession of the law into disrepute, and a solicitor

guilty of such offences cannot expect to be treated leniently."

I refer also to the observations of my brother Tadgell at p.11. In Ryan's Case a non-custodial sentence was imposed and not disturbed on appeal, but at p.10 the learned Chief Justice emphasised that the mitigating factors were very strong.

20. The applicant in this case, perhaps through weakness of character and certainly without some of the circumstances of aggravation that almost inevitably attract a custodial sentence, nevertheless repeatedly stole money from clients who trusted him in a professional capacity. In my opinion the sentence was clearly within the range that was available to the learned judge in the exercise of his Honour's discretion, and the application should be dismissed.

The order of the Court is -

Application dismissed.

CROCKETT AJA I have been unable to discern any error in the exercise by the judge of his sentencing discretion. I agree that the application should be dismissed.

Profession Practice Act 1958

R v Adam Krizmanic \[1995\] VSC 185; \[1995\] VICSC 185

At a glance

Court

Decision date

Before

Source

Judgment (27 paragraphs)

R v Adam Krizmanic [1995] VSC 185; [1995] VICSC 185 (21 August 1995)

Parties

Legislation Cited (1)