R v Carr [2002] NSWCCA 434 | Case summary

It is to be noted that Mill is relied upon as authority for the cited passage from Pearce , above. 5 Thus it can be observed that the initial "Pearce" step, namely the fixing of a sentence in respect of each offence, is critical. The further "Pearce" step is the determination of the question of "totality". The resolution of that second question may or may not require cumulation in whole or in part. It is in my view too easy for an appellate court to come to the view that a sentence considered by it subjectively to be lenient is therefore erroneous merely because there has been no cumulation in whole or in part. 6 I agree that in circumstances where specific submissions have been made by one party or the other (here, the Crown) on the question of cumulation, the sentencing judge should be otherwise than silent on that aspect of the exercise of the sentencing discretion. 7 I add that what I will call the "unity of the occasion of sentencing" namely the one judge sentencing the one offender on the one occasion in respect of more than one offence should not be permitted improperly to intrude upon the correct application of principle. 8 Sentencing for the kinds of offences the subject of this application must not overlook the simple fact that the conduct is such as the offenders in positions of trust who conduct themselves in the way this applicant has are "criminals" and I agree with Howie J's observations in paragraph 40 of his reasons (see Regina v Burke [2002] NSWCCA 353). 9 HIDDEN J: I agree with the orders proposed by Howie J and with his Honour's reasons. I also agree with the observations of Levine J. 10 HOWIE J: This matter was heard by this Court on 13 September 2002. On that date I indicated my agreement with an order that this appeal by the Crown should be dismissed. The following are my reasons for coming to that view. 11 On 16 May 2002 the respondent was sentenced by his Honour Judge Herron for two offences in respect of which he had pleaded guilty under the provisions of s 51A of the Justices Act. The first offence was contrary to s 176A of the Crimes Act and charged that being a director of a body corporate the respondent defrauded that company. The maximum penalty prescribed for that offence is 10 years imprisonment. The second offence was fraudulent misappropriation contrary to s 178A of the Crimes Act. The maximum penalty in respect of such an offence is imprisonment for 7 years. 12 In respect of the first offence the respondent was sentenced by his Honour to imprisonment for 4 years to commence on 16 May 2002 with a non-parole period of 2 years to expire on 15 May 2004 the date upon which the respondent will be eligible to be released to parole. In respect of the second offence the respondent was sentenced to a fixed term of two years imprisonment to commence on 16 May 2002 and to expire on 15 May 2004. 13 By notice of appeal dated 10 July 2002 the Director of Public Prosecutions appealed against the sentences imposed upon the respondent on the basis that they were manifestly inadequate. 14 The first offence was alleged to have been committed between 1 July 1993 and 30 June 1996. During that period the respondent, who was then a solicitor, held the position of director of two related companies, Spencer Gulf Telecasters Limited and J.M. Sturrock Pty Ltd ("Sturrock"). The respondent was also retained by Sturrock to provide legal advice on television broadcasting legislation and to assist in the preparation of various submissions to the government on such legislation and broadcasting regulations. The respondent was not paid a fixed amount as a retainer but was reimbursed for the work and time that he expended in giving this legal advice in accordance with invoices that he produced to the company. In addition he was paid a director's fee of $15,000. 15 During this period the respondent had custody and control of the financial records of Sturrock including the company's chequebook. The respondent was authorised to draw cheques for matters within the normal operation of the company's day-to-day business. In June 1996 the company's accountant sought information from the respondent in order to complete financial statements and income tax returns. The respondent delayed in forwarding that information to such an extent that the accountant's concerns were raised with the other director of the company. 16 Eventually the respondent complied with the request made of him, and the records forwarded to the accountant revealed matters of concern in the company's financial accounts. As a result a complete review was conducted of the financial records of Sturrock and a number of discrepancies discovered. These related to excessive charges for services rendered by the respondent, duplicates of charges together with other excessive drawings made on the company's bank accounts. When questioned about these matters, the respondent indicated that some of these drawings were advances against future fees while others were merely errors on his part. As a result of the respondent's fraudulent activities, he had paid to himself from the company's funds the sum of $321,666 to which he was not entitled. 17 The matter was not immediately reported to the police. Rather, the respondent and his wife were required to enter into a deed whereby they acknowledged their liability to the company in respect of the amount defrauded and promised to repay it. The respondent was also required to resign as a director of the companies. However, no repayment was made until 29 June 2001 when a cheque for $85,800 was paid to Sturrock on behalf of the respondent, that money being derived from the sale of a property owned by the respondent and his wife at Hawkes Nest. 18 The second offence arose from the respondent's association with a company called Danglass Pty Ltd ("Danglass"). That company was involved in a property development that resulted in a large number of townhouses and home units being sold under a company called Stronach Pty Ltd. In 1998 the respondent was retained as a consultant solicitor for Danglass and his duties involved the preparation of contracts, conveyancing and other legal duties involved in the establishment and the sale of the development. In particular the respondent acted for the company on the sale of about thirty townhouses. The purchase price was to be paid into a trust account held by a real estate agent for the development or in the trust account of the respondent until the monies were ultimately forwarded to Danglass. 19 On 28 June 2000 the solicitor of one of the purchasers of a townhouse in the development contacted the respondent and indicated that the purchasers wished to settle the matter prior to 1 July 2000 in order to avoid the imminent Goods and Services Tax. The respondent advised the solicitor that a cheque should be made out in his name and sent to him. On 29 June 2000 the respondent received a cheque for the outstanding money owing for the purchase being $358,952.68. The respondent immediately deposited that cheque into his personal bank account. He failed to notify any person from Danglass that the settlement had occurred or that the payment had been made. For some period thereafter the accused indicated to persons from Danglass, who were inquiring as to the settlement of the matter, that it was imminent but had not occurred. 20 On 21 March 2001 the directors of Danglass became aware that settlement of the property had taken place the previous year and that the money had been paid to the respondent. The next day the respondent was confronted with this information and confirmed that it was true. When asked what he did with the money, he replied, "I put it in my bank account for my own use. I am sorry." When asked what he had spent it on, the respondent replied, "Lifestyle." He was asked if there was any money left and he said, "About $30,000, I spent the rest." The respondent was taken to the branch of the Building Society where he maintained an account and he handed over a Building Society account passbook and a cheque payable to Danglass for $30,966.56. 21 The respondent was arrested in respect of the offence committed against Danglass on 20 April 2001 after he voluntarily attended the Newcastle Police Station. A short time later complaint was made to the police in relation to the offence committed against Sturrock and the respondent was charged with that offence as well. 22 The respondent declined to be interviewed by the police and did not give evidence before the sentencing judge. As a result there was little evidence to explain what had happened to the money that the respondent had obtained as a result of the offences. The respondent told a psychiatrist, who prepared a report for the sentencing court, that he had spent the money obtained from Danglass to repay a debt on the holiday house at Hawkes Nest. The psychiatrist reported:

Mr Carr said that he had 'great parents'. His mother, in particular, idolises him. He said that "She will do anything for me". She even hand tailored his suits. It is obvious that his mother has great dreams for him as a famous and successful individual. Subsequently, Mr Carr has always strived to meet that ideal because "I just cannot disappoint my mother". His mother was particularly proud of him when he worked for Spencer Gulf Telecasters Ltd. She was proud of his somewhat glamorous lifestyle of flying around negotiating various business deals. He in turn thrived on her admiration. It seems that he cannot separate himself from her fantasies. Mr Carr has a great capacity for denial. He copes with life problems by ignoring them, thereby creating an alternate reality which others would perceive as lies. The more he is stressed, the more he retreats into a world of self-deception. He also goes into a state of inaction when stress strikes. As a result, his problems become bigger and more insurmountable. 23 The respondent's wife gave evidence before the sentencing judge but she could throw little light on either the motivation of the respondent for committing the offences or what had happened to the proceeds. It was her opinion that the respondent had no ability to manage money and that he tended to fantasise in relation to his financial situation. She indicated that she was not aware of circumstances in which the respondent left his position with Sturrock although she thought that it was because of a dispute over fees. She said that she agreed to sign the deed because her husband had told her that, if she did not, Sturrock would go to the Law Society. The respondent's wife gave evidence that she received no money from the sale of the Hawkes Nest property after it was sold in June 2001. 24 The respondent is aged 49 years. He is married and has three children, a son aged 17 and twin daughters aged 15. His wife gave evidence that she was confident that her relationship with the respondent would survive his incarceration and that both she and he had received marriage counselling after the disclosure of the offences. She believed that since the respondent's arrest he accepted reality and realised the seriousness of his conduct. She said that she would support the respondent and insist that he undergo any therapy necessary to help him overcome his denial. She gave evidence that the family finances were "a shambles" and she anticipated having to sell their home. 25 The psychiatric report indicated that, since the respondent's arrest, he had been suffering from an adjustment disorder with anxious mood. The respondent was receiving two different forms of psychiatric treatment: he was being prescribed anti-depressant medication for depression and receiving psychotherapy to help him confront his denial. The psychiatrist indicated that the respondent needed long-term therapy in order for him to confront his problems and that his prognosis was moderately good. 26 There was also before the sentencing judge a reference from the Dean of Newcastle detailing the respondent's involvement with Christchurch Cathedral in Newcastle and his participation in its community activities. The respondent had given generously of his time and resources both to the cathedral and to the Newcastle Grammar School where his children have attended as students. 27 There was also tendered a letter from the General Manager, Corporate Affairs for Prime Television Ltd indicating that the company intended to continue to use the services of the respondent when he was released from custody. 28 The major thrust of the appeal by the Director of Public Prosecution is the contention that it was erroneous for his Honour to have made the sentence for the second charge totally concurrent with the sentence for the first charge, it being a separate and serious act of criminality committed in entirely different circumstances and against a different victim than that in the first offence. It was submitted that as a result the sentence imposed failed to comply with the proper approach for sentencing for multiple offences as laid down in Pearce v The Queen (1998) 194 CLR 610 and was manifestly inadequate. 29 Mr Byrne SC for the respondent has challenged the last assertion, particularly having regard to the respondent's age and character. He relies upon the extensive delay in the prosecution of the first, and more serious of the offences as a mitigating matter. In this regard he relies upon the decision of this Court in R v Todd [1982] 2 NSWLR 517 at 519 where the importance of fairness to the offender was stressed in cases of extensive delay between offence and sentence. In the present case the defrauding of Sturrock was discovered in 1996 but he was not charged until 2001. 30 In that regard the sentencing judge found the failure of the victim of the first offence to report the matter to police as "a little unsettling". I do not view it in the same light. It seems to me to have been a compassionate course adopted by the owner of the business in recognition of the lengthy and valuable service performed by the respondent to him and his father over a number of years. The owner even took the step of refusing to co-operate with the investigation by the law society into the conduct of the respondent, presumably in the hope that the respondent would be able to retain his practicing certificate. I do not have any difficulty in understanding why, when the respondent proved himself unworthy of such consideration by again defrauding a client, that the matter was then reported to police. It should be noted that, notwithstanding that no money had been repaid to Sturrock until after the respondent's arrest for the second offence, no action had been taken against him to enforce the deed. 31 I do not believe that the circumstance of the delay in this case is of very great moment in determining the appropriate sentence to be imposed for the first offence. There is nothing that indicates that the delay worked any injustice upon the respondent or had a significant detrimental impact upon him. But I accept Mr Byrne's argument that the sentence imposed for that criminality, in light of the respondent's plea and the delay in prosecution could not be said to be inadequate punishment for that offence. The maximum penalty was 10 years the sentence imposed was four years. Having regard to the length of time over which the acts giving rise to the offence occurred, the serious breach of trust involved (in that the respondent was both a solicitor and a director of the company), the amount of money involved and importance of general deterrence the sentence was an appropriate one for that offence. 32 I cannot however, accept the submission that the sentence imposed was appropriate to meet the overall criminality that was before his Honour and in my view that is because of the failure of his Honour to impose a cumulative sentence for the second offence. I acknowledge that it is a matter for the exercise of discretion whether a sentence for one offence should be made cumulative or concurrent on the sentence for another offence: Hammoud (2000) 118 A Crim R 66 at [7]. I also acknowledge that this Court must exercise restraint in interfering with the exercise of that discretion particularly when it is asked to do so on an appeal by the Crown; R v Institoris [2002] NSWCCA 8 at [95]. 33 But with unfeigned respect to the sentencing judge, who is very experienced in sentencing as in other aspects of the criminal law, his Honour does not appear to have turned his mind to this issue. It was accepted on the hearing of the appeal that the Crown had made a submission to his Honour that the sentences for the offences should be cumulative. The sentencing remarks are lengthy and detailed in respect of both factual aspects and relevant sentencing decisions of this Court. But they are resoundingly silent on the question of the significance of a second serious offence committed after the first fraud had been discovered and when the respondent had been given, for whatever reason, the opportunity to reform himself without the loss of his good name or his profession. That was such a seriously aggravating feature of the second offence, that there had to be some mention of it and some discussion of how it impacted upon the assessment of the appropriate sentences and how they should be structured. 34 The Court should be slow to attribute error to a sentencing judge simply on the basis that the judge has failed to refer to a matter during the course of giving remarks on sentence. This is particularly so where the judge is as senior and experienced as the sentencing judge in the present matter. But there are occasions when the matter is of such importance to the exercise of the sentencing discretion that a failure to mention it at all is indicative of error, particularly where it is a matter that has been addressed by at least one of the parties. Further in this particular case the structure of the sentence is, as Mr Byrne has conceded, not in accord with the dictates of Pearce v The Queen, and current sentencing practice. 35 The failure to sentence in the way that Peace v The Queen requires, that is by fixing an appropriate sentence for each offence and then determining whether to accumulate them in whole or in part to reflect the totality of the criminality, is no matter of technicality. Nor is it mere pedantry to criticise the exercise of a sentencing discretion which does not accord with the view expressed by members of the High Court and which has been applied on numerous occasions by this Court. In R v AEM (Snr) [2002] NSWCCA 58, it was described as a "fundamental principle". However, I acknowledge that, if at the end of the day the overall sentence imposed were appropriate to reflect the totality of the criminality, there would be little reason for this Court to intervene simply to redress that error, particularly on a Crown appeal. But in the present case it confirms my view that his Honour's approach to an assessment of the totality of the criminality before him was erroneous. 36 In my opinion the totality of the criminality in the offences before his Honour could not be reflected in the sentence for the first offence notwithstanding its seriousness. Yet that is what the structure of the sentences imposed by his Honour asserts when the sentence for the second offence was made wholly concurrent with that for the first. If his Honour inflated the sentence for the first offence in order to incorporate the criminality for the second, then that was clearly an erroneous way of proceeding. But in my opinion the sentence for the first offence is clearly not excessive given the seriousness of the criminality that it encompassed. 37 The second offence was itself a very significant criminal act, albeit involving only one act of criminality, which was committed in breach of trust. It was clearly planned at least in so far as the respondent gave instructions to have the cheque paid to him personally. In no way could it be considered to be part of the course of conduct involved in the first offence. The second act of offending showed the respondent's manifestations of contrition in respect of the first offence to be as hollow as the façade he displayed as an honest, upstanding member of the church and local community. It disentitled him to any leniency in respect of that offence. 38 I am persuaded that the sentencing of the respondent miscarried when his Honour imposed a concurrent sentence for the second offence and that as a consequence the overall sentence imposed upon the respondent was manifestly inadequate. 39 What then should be this Court's response? Taking into account double jeopardy, it seems to me that the adjustment which should now be made to the sentence to address his Honour's error and the inadequacy of the punishment inflicted upon would be minimal in terms of the period which the respondent would be required to serve before being eligible for release to parole. But it seems that the consequence would be unduly harsh so far as the nature of the sentence to be served by the respondent is concerned. We have been informed that if the minimum period of imprisonment were increased, it would result in the prisoner being re-classified to maximum security. That fact would not be a relevant consideration in determining the sentence at first instance but it seems to me that it should be considered in determining whether now to intervene. This is particularly so where the increase to the non-parole period would be a relatively modest amount although no doubt a significant increase in punishment for the respondent. 40 I am prepared to give the respondent the benefit of the doubt that I feel about whether the sentence should be increased and would propose that the appeal be dismissed. This outcome should not be used to justify the result of any other sentencing discretion for like offences. Nor should the respondent and like persons who commit similar offences in positions of trust be regarded as other than criminals richly deserving of punishment in prison, whatever the nature of that imprisonment might be.

R v Carr

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