R v Atalla [2002] VSCA 141

10. As a consequence of orders for cumulation, a total effective sentence of seven years and six months' imprisonment was imposed, in respect of which his Honour fixed a non-parole period of five years and six months. He also made orders, by consent, pursuant to s.86 of the Sentencing Act 1991, for compensation in the sum of $4,328,520.63 in favour of the victim.

13. Having been granted leave to do so by a judge of this Court, the appellant appeals against the non-parole period fixed on five grounds, namely:

"1. That the learned sentencing judge erred in directing insufficient disparity between the head sentence and the non-parole period. 2. That the learned sentencing judge failed to give appropriate weight to factors personal to the appellant including:- (a) the appellant's age; (b) the appellant's lack of prior convictions; (c) the appellant's plea of guilty at the earliest possible stage; (d) the evidence that the appellant was of low risk to commit further offences; (e) the appellant's prospects of rehabilitation. 3. That the learned sentencing judge failed to give appropriate weight to the evidence that the appellant was diagnosed as a pathological gambler. 4. That the learned sentencing judge erred in placing too much weight on principles of specific deterrence, retribution and denunciation. 5. That the non-parole period of the sentence is in all the circumstances manifestly excessive."

Grounds 2, 3 and 4, although not so expressed, have been, as I have indicated, argued by reference to the non-parole period.

18. The circumstances surrounding the commission of the appellant's offences need only be described briefly. The appellant was 17 years of age when, in 1975, he commenced employment with the Federation Insurance Company. That company was in due course taken over by Switzerland Insurance Company and then by the victim corporation, Wesfarmers Federation Insurance Limited. Initially, the appellant worked as a junior claims officer, but he was promoted to the position of senior claims officer approximately 18 months later. His duties thereafter included the final authorisation of insurance claims. Some time in 1991, he began to re-open completed claims. He would then authorise, either personally or through a subordinate claims officer, the making of cheque payments to fictitious third parties purporting to relate to the re-opened claims. The cheques so obtained were paid into accounts opened in his own name in various banks, allegedly as trustee for one or another of the fictitious third parties. Between 1991 and 2000, he opened and operated 14 such accounts and created 1,003 fraudulent cheque payments to the total value of $4,328,520.

21. The sentencing judge accepted that most of the money so obtained was spent in gambling of one form or another and has been lost. Although, as I have mentioned, the appellant has consented to an order for compensation, it is unlikely that any significant proportion will ever be repaid.

24. Turning then to the grounds of appeal, in view of the way in which this matter has been argued before the Court, I propose to address grounds 1 and 5 together.

28. The appellant has contended through these grounds that the sentencing judge fell into error in that the disparity between the head sentence imposed and the non-parole period fixed indicated that insufficient regard must have been given by him to a number of mitigating factors personal to the appellant, including what had been described as "his pathological addiction to gambling". Before us, and central to his argument, Mr Mason submitted that it is apparent from his Honour's remarks that he significantly under-estimated the importance of this gambling addiction on the appellant's mental state. He argued that the statements made by the learned judge in the course of the plea demonstrated a misunderstanding of the law with respect to the relevance of a gambling addiction for sentencing purposes and indicated that he was dismissive of this consideration.

31. That his Honour was mindful of the various mitigating features to which our attention has been directed in argument, when considering the appropriate sentences to be imposed, is apparent from perusal of his remarks. He adverted specifically to the appellant's compulsive gambling and accepted that he appeared to have "lost control" in 1991 to the extent that he found it necessary to mortgage his then unencumbered family home in the sum of $35,000 in order to cover credit card and gambling debts. This mortgage was increased in the following year to $75,000. His Honour accepted that "the motivation for your crime was to feed what had become an obsession", and that, apart from his gambling, the lifestyle of the appellant was modest. I will return to the aspect of gambling a little later.

34. Among the matters to which the judge referred were:

* The age of the appellant, 44 years at the time of sentencing;

* His family situation; the appellant was married with three relatively young children;

* His plea of guilty which was entered at the earliest opportunity;

* His co-operative attitude towards the investigation of the matter by police. [His Honour stated in this context that:

"but for your co-operation it may well be that the web of fraud created by you would not have been unravelled as fully as it has been, nor its scale ascertained."]

* The presence of genuine remorse and a sense of shame; [the appellant continued to suffer from sleeplessness and depression for which he was being treated by a psychiatrist;] and

* His endeavours to rehabilitate himself. [The appellant had, after the termination of his employment with the victim company, secured work as a pizza delivery driver and then subsequently as a taxi driver. He had sought assistance through Gamblers Anonymous and has been in receipt of regular counselling to address his gambling problem.]

Although the learned sentencing judge did not make any reference to the fact that the appellant had no prior convictions, it is implicit in his remarks and in the appellant's history as he outlined it that this was recognised. The appellant was approached by his Honour as a person otherwise of good character and stable lifestyle.

45. Nevertheless, as the sentencing judge pointed out, the activities in which the appellant engaged involved a degree of sophistication, the use of his position to direct innocent subordinates to authorise fraudulent payments and extremely serious breaches of trust. He noted that the appellant had said to the police on this aspect:

"It works because people trust you and you've got the power, you've got control over what's going on."

The appellant's offences required the commission of a considerable number of separate criminal acts perpetrated over a period of approximately nine years and the misappropriation of a very substantial sum of money. Whatever may have been his motivation, his behaviour involved a high level of criminality.

50. With respect to the appellant's obsession with gambling, upon which reliance has been placed before us, as in the court below, the judge stated that:

"while gambling may be an explanation for your behaviour it is not and cannot be an excuse."

That statement is, of course, correct. As Tadgell, J.A. stated in R. v. Cavallin[1]:

"It is ... important that the public does not assume that a crime which is to some extent generated by a gambling addiction, even if it is pathological, will, on that account, necessarily be immune from punishment by imprisonment."

56. This does not mean, and I do not understand his Honour to have so suggested, that the significance of the contribution of gambling addiction to engagement in some form of criminal activity is always to be discounted as a mitigating factor. However, it is also clear that the occasions on which it would be appropriate to do so will be uncommon. His Honour concluded, correctly in my view, that this was not such a situation. I observe in this context that he stated in the course of the plea hearing:

"My understanding of it is that gambling, if you like, or any other addiction, is not an excuse, it is an explanation, and may to some extent be taken into account by this trial judge in sentencing, but it is as far as it goes."

60. Acknowledging the approach adopted by this Court in a number of earlier cases[2], counsel for the appellant has argued that nevertheless addiction to gambling can assume a level of significance as a mitigating factor in the determination of an appropriate non-parole period and that in the present matter, as a consequence of his Honour's dismissal of this consideration, he fell into error in not fixing a lower minimum period than that imposed. This argument was the subject of consideration by Charles, J.A. in Bulfin[3], where he stated that:

"[I]n the case of white collar crime, the lives of the offenders and their families will frequently have been devastated by the consequences of discovery and punishment. The present case is a very good example. It would be difficult not to feel great sympathy for the respondent's wife and family and, indeed, for the respondent himself. But I think there is a serious risk that the consequences of discovery and punishment, and the havoc that a custodial sentence usually wreaks on the lives of the white collar criminal and his or her family, may have a tendency to distract attention from the importance that general deterrence ought to carry in the imposition of sentences for crimes such as the present. ... Whatever the motivation, offences of the kind here in question almost invariably involve a carefully calculated course of conduct over a long period, repeated deliberate acts of dishonesty, substantial amounts of money, and, frequently, losses (often tragic in their impact) to large numbers of small investors. The offender often holds a position making it possible, or has the ability, to disguise or camouflage the conduct in question. Detection is difficult, the investigation of the crime usually lengthy and very expensive, and the problems of trial and proof will frequently be extreme. ... [T]he element of general deterrence will usually carry particular significance in sentencing for crimes such as the present, both in relation to the total effective sentence and the non-parole period; together with a requirement for strong denunciation by the sentencing court. For persons first contemplating corporate criminality, a sentence which requires an offender to spend a substantial term in actual custody by virtue of the non-parole period fixed, is, in my view, much more likely to focus their attention and have real deterrent impact than a longer head sentence, much of which is likely to be served on parole after the offender's release from custody. If this view be correct, to fix an unduly short non-parole period would, in cases such as the present, be quite subversive of the whole concept of general deterrence ..."

The considerations both factual and conceptual addressed by his Honour in these passages were clearly present in the matter before us.

65. I am unpersuaded that there are any special circumstances present which might require the creation of greater disparity in this case or some modification of the approach generally adopted with respect to sentencing in a matter of this kind. There is nothing in the sentencing judge's remarks that could give rise to any reasonable suggestion that he may not have appropriately taken into account any of the matters to which he adverted and to which I have referred in his determination of an appropriate minimum term. I am unable to detect any error in those remarks nor is any suggested by the sentence itself. It is further to be noted that, bearing in mind there is no fixed ratio between the head sentence and the minimum term imposed[4], the disparity between the head sentence and the minimum term to be served in the present case is within the range normally set.

68. In these circumstances I consider that grounds 1 and 5 must fail.

72. Grounds 2, 3 and 4 are essentially particulars of the assertions contained in grounds 1 and 5 that the non-parole period fixed was manifestly excessive in the circumstances. They need not be further addressed.

79. For the reasons given by Vincent, J.A., I agree that the appeal should be dismissed.

87. The formal order of the Court is that the appeal is dismissed.

[1] Unreported, Court of Appeal, 4 July 1996 at 10.

[2] See R. v. Petrovic [1998] VSCA 95; R_. v. Pascoe_, unreported, 244 of 1997, 29 April 1998;

R. v. Martin (1994) 74 A.Crim.R.252; R. v. Dawson, unreported, Court of Appeal, No. 283 of 1996, 27 May 1997.

[3] DPP v. Bulfin [1998] 4 V.R. 114 at 131 and 132.