R v Coukoulis [2003] VSCA 22

5. It will be necessary to say something of the detail of these sentences in due course but the general structure of the sentence was as follows. On the first count, pursuant to s.42 of the Legal Profession Practice Act 1958, which alleged that the appellant as a solicitor had a deficiency of $6,859,828.79 "in or payable into his trust account" for which he had not given a sufficient explanation, he was sentenced to be imprisoned for a term of four years. On the 2nd to 48th counts which alleged a large number of thefts, indeed many more than the number of counts, in that several counts included rolled-up allegations, it was alleged that some $8,167,527 was stolen over a period exceeding two and a half years. The amounts alleged to be taken in each count varied from as low as $4,000 to as high as $2,005,572.92. The sentences imposed on each of these counts varied considerably in that for some lesser amounts, including one count of theft of $10,000 and one of $4,000 [1], a sentence of one year was imposed in each case, whereas for what were perceived to be the four most serious counts (subject to a strongly arguable contention that one of those counts was mistakenly included in that group) a term of five years' imprisonment was imposed. One count resulted in a term of three years' imprisonment but by far the majority of the counts, in fact some 40 of them, led to the imposition of a term of two years' imprisonment. His Honour made no orders for cumulation with respect to counts 2 to 48 among themselves, so that in respect of the theft sentences the statutory provision for concurrency left the total effective sentence with respect only to those counts at five years' imprisonment. However, with respect to count 1, the defalcation count, his Honour directed that the whole of that term of imprisonment be served cumulatively on count 2 for which the appellant had been sentenced to a five year term. I have already stated the total effective sentence and the minimum term.

8. The primary objection to the learned judge's sentence is the total cumulation of the sentence on the defalcation count, but the second ground complains of a failure to take into account sufficiently a delay of nearly six years between the date of detection and the date of prosecution and finally there is a complaint that the sentence is manifestly excessive.

11. It is necessary to describe the essential events which formed the basis for charging the appellant and for the imposition of the sentences upon him, although most of the detail can be found in the judge's careful and detailed reasons for sentence which may be found at [2002] VSC 7.

14. The appellant was a solicitor who was admitted to practice in 1986 and who had set up practice as a sole practitioner in Frankston the following year. Much of his work involved operating a mortgage investment practice where clients invested moneys with him in order that they might be lent to third parties to be secured by first mortgage. Moneys accepted by solicitors in that way or otherwise in connection with a loan to a third party secured by mortgage were treated as trust moneys within the meaning of s.40(1) of the Legal Profession Practice Act 1958 ("the Act"). It should be noted that it is with that Act that we are concerned, not with the Legal Practice Act 1996[2], inasmuch as all the relevant transactions took place before the repeal of the Act by the later legislation. As to the first count it is sufficient for the present to observe that none of the deficiency alleged arose out of a misuse by the appellant of moneys in fact paid for any purpose into his trust account. As I would understand it, the complaint made, and the basis for the count to which the appellant has pleaded guilty, is that a significant proportion of the stolen moneys which are the subject of counts 2 to 47 were thereby "payable into any trust account" of the appellant as a solicitor, but that they were not paid in in circumstances where they should have been and that, for obvious reasons, he has been unable to give any satisfactory explanation for that failure. The deficiency was alleged on a between dates basis, that is between 8 July 1993 and 13 March 1996, a deficiency in effect arising on each occasion that moneys were wrongfully misappropriated by the appellant and not paid into his trust account, in that no such moneys were held in the trust account to be applied in accordance with the defrauded clients' instructions. Each failure to pay in was, in a sense, cumulative, and it was not overcome by any subsequent payment in on trust for the benefit of any of those clients, so that at the end of the period the sum alleged by way of deficiency, being $6,859,829 or thereabouts, was the sum total of each of the thefts of the moneys which have been treated as relating to the appellant's practice and which were not paid in in accordance with the Act and were thus, in total, not available for application on clients' instructions. It should be noted, however, that the admitted deficiency did not result in the whole $6,889,828.79 remaining unpaid, for, as will be seen, a considerable number of the later "loans" were used to repay moneys stolen earlier. In the end the actual claimed losses of his clients amounted to only some $3,963,781.53, which together with interest and some costs amounting to $427,154.73, was ordered by the judge to be paid by the appellant to the Legal Practice Board by way of compensation.

17. It will be apparent from the figures that something in excess of $1.15m. has not been characterised as moneys received and stolen by the appellant in his capacity as a solicitor. The stolen sums not treated in this way largely arose out of sums which he obtained for similar "investments" but through a finance broker named Quayside Finance. Because of its intervention it has been thought inappropriate to treat those transactions, which otherwise involved thefts committed in a similar way, as being ones directly related to his practice and so giving rise to a deficiency when not paid into his trust account. Those counts which arose out of the activities of Quayside Finance included counts 7, 8, 15, 17, 20, 22, 23, 24, 36, 37 and 42.

20. The other charges of theft may be summarised in the following way. It seems that the appellant, although having some success in his practice as a solicitor, was becoming more and more burdened with debts both from running a single practitioner practice in a somewhat expansive way and more particularly from a large number of personal and family financial obligations. By the middle of 1993 it seems that his debts totalled some $880,000 or thereabouts and he was under considerable pressure from his creditors to repay or pay interest on a number of them. Thus it was in July of that year that the first misapplication of a loan took place in the relatively modest sum of $18,000, which was paid over to him for the purpose of investment on security by one John Pennell, who was well-known to the appellant in that he had made some 211 previous similar investments with the appellant or with the firm by whom he had been originally employed and he was also the father of two sons who had been at school with the appellant, one of whom was his innocent articled clerk at the time. The appellant's subsequent misappropriations were at first sporadic but became constant by 1995, with the result that by the time he was detected in March 1996 he had committed some 178 separate thefts, so it has been estimated, which form the subject of the 47 counts for theft.

23. The majority of the counts, and by far the majority of the thefts, arose out of transactions where, in general terms, lenders, who were usually already clients for one or another purpose, sought to "invest" moneys through the appellant by lending it on anticipated mortgage or other security to another client of the appellant, usually but not invariably unnamed. More often than not some form of security was produced by the appellant to the lender, sometimes a copy certificate of title, sometimes a photostat of such a copy, occasionally an apparently signed mortgage document, but all without the authority of the title holder. Whatever the means used to reassure the lender, the moneys on each relevant occasion were never paid into the appellant's trust account but were in fact paid into his office account, to accounts in the name of companies controlled by him, into other trust accounts controlled by him or, in a considerable number of cases, by merely endorsing the cheque in favour of other previous lenders in repayment or part repayment of "loans" which had been similarly misappropriated. As may be seen from the figures set out above, a considerable number of these loan investments were repaid by the appellant but regrettably a large proportion of those repayments came from similarly misappropriated loans.

26. It will be sufficient to describe a few of the relevant offences, in particular to show the comparative seriousness of each offence and the way in which the judge dealt with that question. As I have said, some 40 of the theft counts attracted a two years sentence, with just two, arising out of a $4,000 and a $10,000 theft respectively, attracting a one year term. It may be said that with one exception, each of the thefts attracting a two year sentence involved sums between $4,000 and $247,500, with one three year term imposed for a theft of $290,262 and the five year terms, with likewise one exception, reserved for offences (including rolled-up counts) involving thefts of between $516,917 and $2,005,572. The exception is that one count of stealing $522,337 resulted in a two year sentence, whereas another count involving a theft of only $72,500 attracted a five year term. The reason for imposing significantly different terms, varying from one to five years, for essentially similar kinds of offences was not explained by his Honour, but I consider that it is fairly obvious that, with the stated exceptions[3]

, he differentiated them primarily on the basis of the amount stolen: at least there seems to be no other rational explanation.[4] The exception was raised by way of criticism of the judge, but my conclusion is that, by mischance, the two counts were confused and that the latter count, count 6, should have attracted only a two year term, whereas count 14 for theft of $522,337 should have attracted, in all the circumstances, a five year term, assuming that the range of sentences was otherwise appropriate: see below at para.[35].

31. A brief consideration of the counts for which the highest sentences were imposed reveals the extent and seriousness of the appellant's misappropriations. On count 2 it was alleged and admitted that some $964,700 was stolen from Mr Pennell as the result of some 27 thefts of amounts ranging from $8,700 to $100,000 commencing with the $18,000 on 8 July 1993, which I have described, to the final relevant theft on 9 February 1996. I have already described the appellant's relationship with Mr Pennell and his family, but the particular vice in these thefts was that, by reason having effectuated many similar transactions beforehand, the appellant had created a situation in which Mr Pennell trusted him implicitly. Mortgage documents were in fact prepared and signed by Mr Pennell on each occasion and from time to time certificates of title were shown to him by way of reassurance, but none of the mortgages was ever carried into effect as the crossed cheques were all paid either into the appellant's office account or to Keelo Pty. Ltd., one of the appellant's companies. It seems that interest of between 12 to 15% was payable on each loan and some of them were short-term only inasmuch as a number were intended to provide bridging finance, but in one way or another the payment of interest and the capital repayments were maintained by the appellant, frequently by use of other misappropriated moneys paid into his various personal accounts. It was only in March 1996, when certain cheques bounced, that Mr Pennell came to complain to the appellant at his office, seemingly on the very day the inspectors from the Law Institute were moving in. It is not surprising that this wholesale fraud attracted a five year penalty.

34. The next count attracting a five year sentence was count 5 which involved over 50 thefts amounting to $2,005,572. These were likewise loans which on this occasion one Robertson, as Director of L.S. Russell Manufacturing Pty. Ltd., believed were being lent out by way of mortgage. It was represented that each loan would be secured by mortgage or other security. On many occasions the appellant showed either a duplicate certificate of title or a photocopy of one to assure Mr Robertson that proper security had been obtained and that a genuine loan had been entered into. The owners of the properties on the certificates of title were, of course, unaware of the misuse of their titles, for in fact the moneys, which were obtained between 14 October 1994 and 22 February 1996, were paid in variously to personal trust accounts in the control of the appellant, to Keelo Pty. Ltd., for the benefit of the appellant's female friend, Ms Barclay, or directly to pay out other overdue loans brought into existence in the same way. A considerable number of the so-called loans were repaid, but, at the time the Law Institute took control, there remained outstanding some $687,000, ignoring for the present any interest then due and payable.

37. Ignoring for the present count 6, for which a term of five years was also imposed, but which involved the theft only of some $72,500 from Mr Robertson, the final count attracting a five-year penalty was count 13 which related to similar loans sought to be made by Mrs Robertson. This alleged that some $516,970.75 was stolen from Mrs Robertson by a number of thefts between 11 May 1995 and 16 February 1996. Mrs Robertson was Mr Robertson's mother and, apart from a number of loans, there was also a payment of $158,199 to the appellant, which was to be used to assist her daughter in the purchase of a home, but which was paid into the appellant's office account and used for his own purposes. As was not uncommon in the appellant's dealings, the funds ultimately needed for the settlement of the purchase of the house were obtained from either his office account or from the proceeds of loans fraudulently taken from another lender, this time Mrs Eunice Smith which was part of the subject of count 3. That count in itself reveals the extent and variety of the deceptions imposed by the appellant on so many of his clients. First, the appellant took part of the proceeds of the sale of Mrs Smith's house, amounting to $157,655.47, which she asked to be invested in an interest-bearing trust account fund, and paid it into one of his own trust accounts operated for his own benefit. The rest went to Keelo Pty. Ltd. Nearly two years later the appellant approached Mrs Smith to obtain what he called bridging finance of $120,000 for a client, so obtaining three cheques from her which were paid either into an account of his female friend or to settle the purchase of Mrs Robertson's daughter's house. Mrs Smith was in fact repaid the $120,000 shortly thereafter from funds obtained from yet another client and which is the subject of count 17, but the first payment of $157,655.47 has never been repaid.

40. I should also mention count 14, which I have referred to above but which also involved thefts of more than half a million dollars, which were inflicted on Harold and Caroline Vear. This was another case of the appellant taking moneys which had been paid over to him to settle conveyancing transactions. In the first place Mrs Vear gave the appellant a cheque for $323,294.45 which was to be held pending the purchase of a property but which in fact was paid into the appellant's office account to reduce its overdraft. Mrs Vear paid a further $1,000 on the following day, but when settlement fell due, which was in fact only three days later, the appellant was able to draw cheques on the office account into which he had managed to deposit several other cheques, one certainly the subject of count 15 and the other or others probably the result of various thefts from the Robertsons. A few months later $17,680 was obtained from the Vears for stamp duty which was paid into the appellant's office account but the stamp duty remained unpaid. Finally on this count the Vears paid $180,363.32 early the next year to the appellant to be held in trust pending settlement of another property purchase, but the money went straight in to the appellant's office account to reduce his overdraft. Typical of the appellant's manoeuvres, the settlement moneys were obtained again from at least two others who thought that they were lending moneys to clients of the appellant on mortgage. This was not inaccurately described in the course of the plea as the appellant's practice of "robbing Peter to pay Paul", although by no means all of the transactions can be so charitably characterised.

43. It is unnecessary to go through the many other transactions constituting counts or parts of counts whereby the appellant stole clients' moneys after representing to them that they would be advanced by way of mortgage or other secured loan to other clients of his practice. The deceits to effectuate these thefts included not merely the unauthorised production of certificates of title or copies thereof but also mortgage documents and the like purporting to have been signed by clients, presumably to add an air of verisimilitude to his fraud. There were also a number of other thefts of an arguably more contemptible kind. On five occasions, represented by five counts which resulted in two-year sentences on four counts and a one year sentence on the fifth, sums varying from $10,000 to $47,496 were received by the appellant for the purpose of resolving civil disputes and which were to be held in trust pending any settlement. In each case the appellant paid the moneys directly into one of his own accounts or in order to satisfy pressing debts owed to others. On one occasion (count 21), there were not even negotiations taking place but the cheque went into his office account. On yet another occasion (count 42) the appellant received a WorkCover pay-out of $120,000, for a client who had suffered severe burns in an industrial accident, which the appellant persuaded the claimant to invest with him on mortgage. As might be expected, a document purporting to be a mortgage signed by the borrowers was produced, but they were not the signatures of the titleholder and the moneys were applied entirely for the appellant's benefit.

46. Precisely who or what provoked the interest of the Law Institute into enquiring into the appellant's behaviour has not been made clear to us on this appeal, except that it is said that in early 1996 he was under considerable pressure from clients who had not been repaid their "loans" or interest on them. There was, of course, no way that any of these defalcations could be discovered by examination of his trust account, for none of the moneys had ever been paid in and there was therefore no record of them whatsoever in that account. Nevertheless two inspectors visited his practice on the morning of 13 March 1996 and he frankly admitted to them that he had had financial problems, that his practice did not generate sufficient income to service all those obligations and that clients and others had been willing to "lend" moneys which had not been accounted for by entry into his trust account. He acknowledged that he had probably in excess of fifty "borrowers" and estimated that his indebtedness was between two and three million dollars. He said he was willing to assist the investigators and within the day he had consented to the appointment of a receiver by the Court under the Act. Thereafter he ceased to practise and has not attempted to practise since. He lived largely as a recluse until he was sentenced without making any attempt to rehabilitate himself by obtaining some new skill or occupation. He expressed himself willing to consent to an order that he be struck from the roll of barristers and solicitors of the Supreme Court, the judge observing that it was extremely highly likely that he would never be permitted to practise again.

49. In the course of an extensive plea before the learned judge emphasis was placed on the appellant's plea of guilty, his co-operation with the authorities, his remorse, his lack of prior convictions and his otherwise good character. Much time was spent in explaining his career and how he had come to incur such heavy debts, even before his chain of offending began. It is clear, so it was emphasised, that he had worked hard both at school and at university in order to obtain his degree and his right to practise, as well as conducting himself industriously and conscientiously when an articled clerk and employed solicitor, and later in his own practice. It was said that he had an excellent reputation in the profession, especially in the Frankston area where he worked, and he also was highly respected in the Greek community. It was emphasised that his debts were by no means all of his own making, for his father had fallen seriously ill as a result of a heart attack while he was still at university. The appellant had had to take responsibility for his parents and his brother, which necessitated his working hard in the fruiterer's shops which his parents were conducting at the time. One shop had to be sold soon afterwards and by 1985 the family owed a substantial sum to a bank which had security on their house. The same year his father died, so that there were further burdens arising out of the high expectations the family had as a result of his qualifying as a lawyer. The sale of the family business did not resolve difficulties for he had to provide $40,000 to set his mother up in a child-care business which was ultimately sold, but all the money and much more was needed to purchase office premises for his practice in Frankston. In the end he had to abandon those premises but he had to find $220,000 to pay out the vendor. The family indebtedness had reached $400,000 in 1991, but at about the same time he felt under an obligation to buy a shop for $300,000 to set his brother up in business in a convenience store, which unfortunately failed. In the end result, as I have said, he had total debts of approximately $880,000 by July 1993 when the first of the thefts took place. The judge expressed scepticism that he could have lost $3,963,781 of the moneys supposedly lent and obtained by him, but in the end his Honour accepted that that was so and that none had been applied to support an extravagant lifestyle or the like. It must be observed, however, that all the stolen moneys were in one way or another applied for the benefit of the appellant, albeit that they were used to support or repay family borrowings or to support or repay other debts which he had incurred by reason of his wrongdoing, so that all of them involved his choosing what use he would make of the misappropriated funds.

52. Having heard these and other matters raised comprehensively on the plea, the learned sentencing judge reserved the matter. A week later he sentenced the appellant giving detailed reasons carefully expressed over 24 pages of transcript. The nature of the appellant's offending was described and summarised by reference to the amounts stolen, the amount in fact lost, the number of fraudulent transactions and the length of offending. He drew attention to the breaches of trust and to the misuse of clients' certificates of title. Having observed that the thefts were not the result of "on the spot", "spur of the moment" decisions, but were the result of premeditation, his Honour described the appellant as a "wicked, dishonest, deceitful man, who deceived and stole from friends, acquaintances and others. You breached your trust. Your level of criminality is indeed high." In particular he noted that the offence under s.42 of the Act was serious, involving numerous transactions and that "by not putting the money into your trust account, you were able to cover up your criminal activities and keep your offending conduct away from the eyes of your auditors ...". Having regard to the fact that the appellant had demonstrated industry and intelligence, his Honour considered that any sentence must reflect not only the gravity of the offences, but must also deter both him and other practitioners from similar dishonesty in the future.

55. His Honour then turned to the mitigating factors which the appellant could call in aid. His early plea of guilty and lack of prior convictions were noted, as well as the appellant's accepted remorse for what he had done. He referred to the appellant's loss of his reputation and of his right to practise. The judge, in particular, spent much time considering the six year delay between the appellant's detention and the sentence, largely attributable to delays in investigations by the Major Fraud Squad, such that he was not finally charged until December 2000.[5] Of this the judge said that "there is no doubt that the delay has been inordinate ... and unfortunate". The appellant had become a recluse, living in a modest house in outer metropolitan Melbourne, but his Honour was prepared to accept that his lack of rehabilitation and his failure to obtain new skills resulted from what he saw as the inevitability of a gaol sentence. The judge said, after reference to the relevant authorities, that the circumstances in themselves "represented a form of sentence", such that he had "placed substantial weight on the delay factor, which [has resulted] in a not insubstantial reduction in the sentence". Nevertheless, and notwithstanding his contribution to the Greek community, the appellant's conduct was so serious as to require the reflection of both general and specific deterrence in the sentencing process.

58. In the end the learned judge said that he was obliged to take account of the seriousness of the offences, their duration and the appellant's "flagrant breach of trust" to impose a long period of imprisonment, fixing on a total effective sentence of nine years. I should add that his Honour gave no explanation as to why he made all the theft counts concurrent, but cumulated the whole of the defalcation sentence of four years, except that he believed that it accorded with the principles stated in Director of Public Prosecutions v. Grabovac[6], so that he believed that the total effective sentence gave effect to the principles of totality and proportionality. Presumably his Honour sought to mark the special quality of the offence under count 1 from the theft counts by ordering that the whole of the sentence on that count be served cumulatively. As to the minimum term of six years, his Honour said that both delay and the need for rehabilitation justified a somewhat longer potential parole period than normal.

(i) Wrongful cumulation of whole of term imposed for defalcation

63. The first ground relied upon by the appellant contends that the learned judge failed to order concurrency "between count 1 and counts numbered 2 to 48". As originally stated, the appellant contended that there had been, in effect, double punishment in that the conduct giving rise to the relevant counts of theft "must have been the very same conduct which, in part, gave rise" to the offending comprehended by count 1.[7] So it was also argued that there should have been either total concurrency or almost total concurrency. In the end it was conceded that the error was merely in the mode of exercise of an undoubted discretion, that is, the argument was confined to a contention that the cumulation of the whole term of four years was manifestly excessive.

66. In substance I agree with this latter contention but not necessarily with all the premises on which it was based. To my way of thinking the judge erred only in apparently treating the offence under s.42 of the Act as entirely different in character and, secondly, in failing to apply the principle of totality as described in Grabovac to all offences the subject of the plea. It cannot be denied that the principles therein described should be applied flexibly, in that in some cases a small sentence for a quite disparate offence might be fully cumulated, but, in general, if proper sentences are imposed on each count, it will ordinarily be necessary to order considerable concurrency in each case to avoid imposing an inappropriately "crushing" sentence. However, it should not be assumed, from the judge's particular exercise of discretion, that he did not properly consider that nine years overall was the appropriate total effective sentence having regard to the principle of totality. The error was only in the manner of cumulation. Whether or not it was manifestly wrong, such a cumulation certainly required some explanation by the judge in the light of his permitting all other counts to be served concurrently.

69. If it were not for two factors, I would have hesitated before setting aside an order for cumulation as such. The first is that the order seemed to be based on the assumption that a count under s.42 was entirely different in character from the other offences. The second is that there has been a misconception in principle, namely, that a different kind of offence ought to be wholly cumulated, notwithstanding that all other offences are left wholly concurrent. A third factor, but peculiar to this case, is that the sentences on each of counts 6 and 14 were clearly inappropriate and must be put right, a matter to which I shall turn in due course.

72. As to count 1 alleging breach of s.42 of the Act, neither the appellant's, nor the respondent's, arguments were entirely compelling. The respondent sought to justify what the judge had to say by asserting that an offence under s.42(1) was "an entirely different offence". Of course, many aspects of such a count were or might be different, but it was essentially a "defalcation" offence[8], which might be placed together in the criminal calendar with other property offences, such as theft, albeit that there were further aspects to the offence. In many, indeed the vast majority of such offences, the charge was brought as a result of the wrongful taking of moneys by a solicitor. Cases, of course, occurred where there had been a mere failure to account without proper explanation by a solicitor, but they would have been covered by s.s.(2) of s.42. There was necessarily a further element, above those required for theft, which had to be satisfied, namely the failure to pay the moneys taken into the solicitor's trust account and properly account for them.

75. The learned judge was correct in characterising the offence as serious, although the relevant maximum term at the time was only seven years, compared to 10 years for theft.[9] One may assume that the latter difference explains why his Honour chose to impose the higher sentences of five years for several counts of theft. But the defalcation offence itself cannot be treated as a minor regulatory offence: it reflected the importance of the need for solicitors to pay all moneys received from or on behalf of their clients into their trust accounts, which in turn provided protection to clients because of the strict trust and auditing requirements of the Act. The very fact that in this case the moneys were not paid in meant that the auditing provisions would and did not provide protection, leaving the appellant's defalcations untouched and undetected and his clients unprotected for well over two and a half years.

78. On the other hand, the elements of a s.42(1) offence were not, as the appellant contended (at least at first), the very same conduct as amounted to the thefts, or the great majority of them. Although the Court received little analysis of what s.42(1) required, in effect each relevant theft was arguably complete before the appellant's obligations under Part IV of the Act could apply and be seen to have been breached. In other words the moneys in most cases had been misappropriated with the relevant intention before the appellant's obligation under s.40 applied. Of course, from the outset he had no intention to pay into his trust account any of the moneys, for thereby his thefts would have been more quickly detected, and his intent to bypass the Act's trust and auditing requirements made it the more easy to infer the necessary intent permanently to deprive his clients. Nevertheless the appellant's intention to ignore his obligations as a solicitor and to deal with trust moneys, as such, in this way added significantly to the criminality of his enterprise over a very long period. It was the deliberate bypassing of the scheme of trust accounts devised for the protection of clients which in this case, as in virtually all others, must be viewed extremely seriously and recognised appropriately in the sentencing process. The term imposed of four years sought to do this, although, having regard to the actual offending, it was by no means a heavy sentence.

81. When it came to questions of cumulation, however, different considerations had to apply. The non-payment of the moneys into the appellant's trust account was serious on any view, but it had to be remembered that every breach of the Act relevantly was proceeded by a theft which also had to be treated seriously, especially as each involved misuse of what ought to have been trust funds and for which the appellant had received what the judge believed to have been an appropriate sentence in each case: his reference to Grabovac made clear his intention to achieve that end. If that was the case, any cumulation, having regard to the commission of multiple offences, had to reflect only that aspect of the defalcation offence which added to the overall criminality of the offending. Whatever otherwise might be done, this was a case where the judge concluded, in applying Grabovac, that very considerable concurrency was required in order to satisfy the principle of totality. In that his Honour was correct but the application was quite inappropriate. The 47 theft counts, although part of a pattern of behaviour, can barely be characterised as one "continuing episode" for sentencing purposes, although they would justify a considerable degree of concurrency, as stipulated in Grabovac. If one were to ignore the extended time over which they were carried out, there were at least half a dozen methods employed by the appellant, though leading to the same end and motivated by the same purpose. Some involved "mere" misapplication of moneys deposited with him for lending, supposedly, to other clients; but others involved the misapplication of moneys paid to the appellant for conventional solicitor-client purposes, such as the consideration to be paid over on completion of contracts for the purchase of land or clients' moneys received for payment over on settlement of civil disputes. Although some clients suffered more than others, there were in the order of 40 different clients affected and the appellant's method of deceiving them varied to degree, in that some required the reassurance of false documents (as they turned out to be) or the production (as it turned out, without authorisation) of other clients' duplicate certificates of title.

84. By reason of this catalogue of offending and of the large total amount of $8.167m. in fact taken from so many victims, some cumulation within the 47 counts of theft was called for, beyond the need also to reflect the additional criminality flowing from the serious breach of s.42(1). In addition, depending on circumstances, cumulation of something between a quarter to half of the sentence for defalcation might ordinarily have been called for in similar cases, but it would be rare indeed that 100% of such a term ought to have been cumulated. The common elements of the offending would make full cumulation ordinarily wrong in principle, unless by chance the "principles" the Court attempted to prescribe in Grabovac have not been implemented, insofar as inadequate terms for thefts or the like have been imposed.

87. It is sufficient at this stage to say that the cumulation order was inappropriate and that the error, as both sides conceded if it were established, reopens the sentencing discretion in respect of all aspects of the sentences imposed. The proper extent of the cumulation will be finally considered below, but in my opinion ground 1 has been made out.

(ii) Whether sufficient reduction in sentence for delay; and

92. It is necessary to consider the second and third grounds of appeal together. The appellant's contention that the learned judge did not give sufficient weight to the delay between detection and commencement of proceedings depended not on a lack of consideration, nor on inappropriately expressed discussion of the factor, but upon a conclusion that the sentence overall was manifestly excessive and an assertion that, in consequence, the "not ... insubstantial reduction" referred to by his Honour was "simply not discernible", as counsel expressed it. In fact his Honour spent much time on this factor, accepting that the delay was "inordinate" and had to be recognised. Indeed he treated the delay as amounting to six years, up to the date of sentencing, whereas the ground refers to a period of four years and nine months up to the time of the laying of charges. That is of no moment: the delay should have received recognition and the judge in no way misstated the relevant considerations.

95. Instead the argument was merged with that relied upon to show that the sentences were manifestly excessive. As I understood the argument, no contention was put forward that the individual terms were excessive, except in the case of the five year term imposed for count 6 involving a theft of $72,500.

98. On this issue, however, notwithstanding the many mitigating factors referred to by both judge and counsel, I do not accept that the sentences taken overall, though severe, were manifestly excessive or, as the Court is now called on to resentence the appellant, that they were or are inappropriate. In reaching this conclusion I am accepting, however, that there was error in cumulation and that there was error in the sentence imposed for count 6. Nevertheless the total effective sentence of nine years was and is appropriate, as was and is the minimum period of six years before the appellant becomes eligible for parole. Notwithstanding that the ultimate overall result should not differ, I believe that the errors were of sufficient consequence to require them to be put right in the course of resentencing.

101. One might enquire why, if this Court were to conclude that the cumulation of the whole four years on count 1 was manifestly excessive, the overall total effective sentence of nine years should be maintained. If only one or two years should be added to the five years imposed for the theft counts, why, it may be asked, should the total effective sentence still be nine years rather than the apparently resulting six or seven years? In my opinion the answer can be easily deduced from the method adopted by his Honour to produce that total effective sentence. In effect, the judge was seeking to apply Grabovac in a case where there were so many terms of imprisonment that it would have been in breach of the principle of totality to cumulate appropriately many of those terms. The solution preferred in Grabovac is to impose the correct sentence for each count and then to work out, having regard to the principle of totality, the proper total effective sentence, making such limited orders for cumulation as are fair in order to reach an overall sentence which is not in breach of that principle of totality or of any other relevant sentencing principle. There will necessarily be some ad hoc reasoning and arbitrary conclusions if that process is to be carried out effectively when numerous counts have to be dealt with in the course of sentencing. It should be the final result, the total effective sentence, and any minimum term, with which the sentencing judge should be primarily concerned. I am not suggesting (nor should this Court countenance) that quite inappropriate orders for cumulation be made, but some cumulations will seem possibly inadequate and others a little too much in what is an otherwise acceptable exercise of discretion as to the period appropriately to be cumulated and what is to be left concurrent.

104. What the learned judge did in the present case was to act on that principle - he looked at the criminality of the offending and of the offender as a whole and concluded that a total effective sentence of nine years was called for. It is in the manner he effectuated that outcome that he misapplied Grabovac and the principle of totality. He failed to look at all the 48 sentences to which those principles applied before deciding on the proper cumulation. Cumulation of a part of count 1 was certainly justified, but that question had to be looked at in the light of the need to cumulate some, at least, of the other sentences for theft. If nine years was appropriate in total, it was certainly also proper and desirable to cumulate some of the sentences imposed for counts 3 to 47, assuming one took count 2 (for which five years was imposed) as the primary term for this purpose. Of course the desirability of that course ultimately depends on whether nine years was in fact appropriate.

107. As to the individual terms, with the exception of those for counts 4, 6 and 14, I have little reason to think that they were not appropriate. I assume that they were graduated in severity on the basis of the amount stolen. One may observe that it would be preferable, though not mandatory, where the range of sentences for the same offence varies between one and five years, to express a reason for such differentiation, but usually it is obvious. Here it is not clear why two counts involving thefts of $10,000 (counts 11 and 25) and one count for only $4,000 (count 45) resulted in two years' imprisonment, whereas two others for like amounts (on counts 47 and 37 respectively) merited only a one year term. In the present case they are of little consequence and one should always remember that the sentencing judge was far better placed to reach relevant conclusions on the extensive deposition materials available to him.

110. As to count 6, as earlier stated, it is reasonably obvious that the sentence was so far outside the pattern of the sentences for the other counts, that I am compelled to conclude that it was erroneous, as the amount in question was only $72,500. If there were exceptional facts, they should have been explained, but the relevant circumstances were not described, unlike those relating to each of the other counts attracting five year terms. Perhaps, because the Crown summary placed counts 5, 6 and 13 together, the details of count 6 were not identified. On the other hand count 14 involved at least three thefts involving in total $522,337, taken from Mr and Mrs Vear as moneys to be applied on completion in relation to the purchase of two houses by them. Those circumstances clearly called for a more severe penalty, far more than the two year term imposed, and I would infer that the judge, unfortunately, confused counts 6 and 14. Even if he did not, the sentences on each of those counts were quite inappropriate and ought to lead to resentencing by "reversing" the terms, so that a two year term should be imposed on count 6 and a five year term imposed on count 14. As occurred in R. v. Lomax[10], there is no reason why a particular term should not be increased, so long as the sentence as a whole is not increased without warning. In fact counsel was warned in the course of argument that the Court might take that approach.

113. Consequently on count 6 the sentence of five years' imprisonment should be set aside and a term of two years' imprisonment substituted. However, on count 14 the sentence of two years should also be set aside and a term of five years' imprisonment be substituted.

116. There is one further count for which I believe the learned sentencing judge imposed too low a sentence, namely count 4. On that count, which involved the misappropriation of some $415,500 from Mrs Pennell, a sentence of only two years was imposed. On one count, count 3, which involved the thefts of $290,262 from Mrs Smith, the only term of three years imposed by the judge was there thought appropriate. There seem to have been circumstances, such as I have already described, which justified that term, so that, if the amount stolen is treated as largely the talisman for selecting the appropriate sentences in this case, then it was not appropriate to sentence the appellant to only two years on count 4 which involved some 17 separate thefts, from June 1994 to July 1995, amounting to $415,500. In the course of resentencing I would set aside the existing sentence and impose a term of three years' imprisonment for that offence. Again, it will make no difference to the total maximum sentence but it is appropriate to impose proper sentences for each count. I would not, however, think it necessary or desirable to deal with the arguable inconsistencies between the lesser counts involving $10,000 and $4,000.

119. Strictly speaking the Court, if resentencing, has no need to examine the question whether a particular sentence is manifestly excessive, but it ordinarily does so, if only to see whether the original sentence can fairly form a basis for resentencing in respect of matters which are not the subject of specific complaint. In the present case, apart from count 6, there was no complaint about individual terms, only about the effect of cumulation and about the effective maximum and minimum terms.

122. As to these latter matters, there can be no doubt that there were a significant number of mitigating circumstances applicable to the appellant: his early plea of guilty; his co-operation with investigating authorities, at least with the Law Institute; clear evidence of his remorse; his lack of prior convictions; evidence of his otherwise good character; his industry; his dedication to his family; the effect on his character of detection and disgrace; the loss of his chosen vocation; the prospects for his rehabilitation; and finally, but not least, the delay and the resulting "punishment" of the appellant while awaiting sentencing. Nevertheless, it cannot be said that the learned judge overlooked any of these matters: he described and explained their significance in detail, especially the effects of delay. There can be little doubt that he gave them all appropriate consideration and reduced the total sentence from that which he would otherwise have imposed.

125. Consequently one must look at the level of the sentence overall, having regard to these factors, to see if it was manifestly excessive. If the mitigating factors led to a reduced sentence, then the sentence otherwise notionally imposed must have been in excess of ten years. The question is whether that level of sentence was justified. In my opinion it was, so that, after making all due allowances, the sentence was not manifestly excessive.

128. This was a case of grave dishonesty by a solicitor at the most serious level. It was clearly the worst case of such offending for over a quarter of a century and comprehended the taking of some $8,167,527. It involved numerous frauds, some 178 of them, committed against some 40 victims over an extended period of more than two years eight months. The vast majority of these thefts, all but those amounting to $1.15m., also involved breaches of trust by a practising solicitor affecting for the most part persons who were either friends or acquaintances or persons who had necessarily placed trust in him because he was admitted as a solicitor and ought therefore, as they had hoped and expected, to behave as an honourable member of the legal profession. It is impossible to overstate the significance of breaches by solicitors of duties of this kind to their clients. It brings the whole profession into disrepute and causes other clients to doubt whether their own, entirely respectable, solicitors might behave similarly. The fact that so many offences, over three quarters of the counts, arose out of breach of trust caused great distress to the appellant's client victims. Some sustained heavy losses and a considerable number lost money which formed a significant proportion of their assets. The various victim impact statements are testament to that conclusion.

131. Those factors cannot be overlooked. They take the offending into a class of criminality that is only to a degree ameliorated by the mitigating circumstances, worthy and significant though they may be. Whereas those factors might otherwise produce a significantly lower sentence in relation to other offences, the need for general and specific deterrence and for denunciation is here, as is the case with other very serious offences, of sufficient importance to call for an overall sentence of the kind in fact imposed by the learned sentencing judge. So far as specific deterrence is concerned, one must accept that it is unlikely that the appellant will be in a position to breach his trust as a solicitor again, but it is nevertheless appropriate that the inordinate greed evidenced by his thefts should be the subject of salutary warning, for theft can be committed in many other circumstances. Again, although the fact that the appellant has had no prior convictions is of importance and must be recognised, these are the very circumstances in which he was able to deceive so many of his clients. His very reputation, as a solicitor and generally in the community, enabled him to obtain the moneys he stole, to persuade his clients and others that he was always acting in their interests, to reassure them and to allow him to dissuade them from enquiring further as to the precise manner of their moneys' application. Implicit faith was, wrongly, placed in him in circumstances where, were the moneys obtained by an unqualified person or through a person with a lesser reputation, those depositors might well have been more cautious about protecting themselves against possible misuse of their moneys. The duration of the offending and the amounts involved are the clearest evidence of how he was able to deceive his clients and the other persons approached through Quayside Finance. Those factors take thefts of this kind outside the ordinary range of thefts from commercial or government institutions or other persons. They deserve the utmost condemnation and condign punishment.

134. I would consequently not view the competing factors differently from the way in which they were viewed ultimately by the learned sentencing judge. Indeed I believe a total effective sentence of nine years, with a minimum term of six years before the appellant becomes eligible for parole, was and is wholly appropriate. I would however structure the sentences in the following way.

137. As to the individual terms I would resentence the appellant as follows. On count 1, for breach of s.42(1) of the Act, I would confirm the sentence of four years' imprisonment. On counts 2, 5 and 13 I would confirm each of the sentences of five years' imprisonment in respect of thefts in excess of half a million dollars. In respect to count 3 I would confirm the sentence of three years' imprisonment. On counts 7, 8, 9, 10, 11, 12, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 38, 39, 40, 41, 42, 43, 44, 45, 46 and 48, each for thefts of sums between $285,000 and $4,000, I would confirm each of the terms imposed of two years' imprisonment. On counts 37 and 47, for thefts of $10,000 or less, I would confirm each of the terms of one year's imprisonment imposed. On count 4 I would set aside the term of two years imposed by the learned judge and substitute a term of three years' imprisonment. On count 6, for the theft of $72,500, I would set aside the term of five years' imprisonment imposed by the judge and substitute a term of two years' imprisonment. On count 14, for the theft of $522,337, I would set aside the sentence of two years' imprisonment imposed by the judge and substitute a term of imprisonment of five years. The terms of imprisonment, as now proposed, are broadly consistent using a yardstick based on seriousness and the amounts of moneys taken. In the present case I would not consider it appropriate necessarily to go further in differentiating between the various counts and I add that I believe it to be entirely consistent that significant differences should be drawn between the most serious and the less serious of those offences.

140. As to concurrency and cumulation, I would propose the following orders, having regard to the practice described in Grabovac and Lomax. Of the sentence of four years imposed on count 1, I would direct that eighteen months thereof be served cumulatively upon the sentence imposed on count 2. Although in other cases a higher proportion of a term of imprisonment for such a count might be appropriate, having regard to the seriousness of such offences and the particular need to protect solicitors' clients in the use and supervision of trust accounts, some compromise must be reached, in order to give effect to the principle of totality, in a case such as the present where so many offences call for punishment, so that three-eighths of the term is, I believe, the appropriate extent of cumulation here to be ordered. Moreover, I would, unlike the learned sentencing judge, order a degree of cumulation of some of the terms for the more significant of the counts for theft. In my opinion it was inappropriate that they should all have been left to be served concurrently, having regard to the variety and seriousness of the appellant's behaviour. I have already remarked on the variety of frauds carried out on clients and others, but it is impossible, again having regard to the number of counts, to reflect the added seriousness of each count and I have chosen to confine the orders for cumulation to the counts involving the larger amounts, for which the heavier sentences were imposed and which, in one additional case, involved a considerable number of thefts. To that end I would direct that nine months of the term imposed for count 5 (which involved many thefts totalling over $2m.) and six months of each of the terms imposed for counts 13 and 14 be cumulated upon the term to be served in respect of count 2. Further I would direct that three months of each of the three year terms imposed for counts 3 and 4 be likewise cumulated on the sentence imposed on count 2 and finally that three months of the two year term imposed for count 9 be also cumulated on the sentence imposed on count 2. Count 9 has been selected as the only one requiring cumulation, on which a two year sentence was imposed, because it involved some ten separate thefts on one Paul Stratmann amounting to $247,500, of which some $192,500 remained unpaid at the time the receivers took over the appellant's practice. Although there might otherwise be reasons for recognising many of the other thefts by cumulation orders, there is a point at which minute cumulation orders can fairly be dispensed with.

143. The total amount to be cumulated upon the sentence imposed on count 2 in respect of the counts for theft is therefore 30 months, which I believe overall and in accordance with the principle of totality is the proper assessment of the extent to which cumulation should here be directed in respect of those offences, having regard also to the extent of cumulation ordered in respect of count 1. The overall total directed to be cumulated is therefore four years, all upon the sentence on count 2, with the consequence that the total effective sentence remains at nine years. Having thought long and carefully about the period to be directed to be served before the appellant becomes eligible for parole, I have concluded that I see no reason to differ from the learned sentencing judge and I would therefore confirm that direction in respect of the non-parole period, namely, that six years be served before the appellant becomes eligible for parole. Although the sentences overall are treated as dating from the time the appellant was originally sentenced, it is nevertheless appropriate to declare that the period of 415 days be reckoned as already served up

to the present date under the sentence imposed by this Court and to order that that declaration be noted in the records of the Court.

147. I would again commend the careful and comprehensive way in which the learned sentencing judge dealt with this difficult case and, if it were not for the fact that the specific technical errors required to be corrected, especially in a case which may be looked at for future sentencing purposes (notwithstanding the increase in the maximum term in respect of deficiencies in trust accounts), one might otherwise have concluded merely that different sentences ought not to have been passed. Consistently with the decision in Lomax, that cannot be here said, notwithstanding that the end result is, unfortunately for the appellant, no different from that which the judge sought to impose. I would therefore allow the appeal but only to the extent of resentencing the appellant in the manner described above, with the result that the total effective sentence remains at a term of nine years' imprisonment, with a minimum term of six years before the appellant becomes eligible for parole.

152. Having had the advantage of reading the reasons for judgment prepared by Ormiston, J.A. I agree that the appeal should be allowed and orders made as proposed, for the reasons given by his Honour.

[1] Two counts for thefts of $10,000 (counts 11 and 25) resulted in two-year sentences and, apart from the fact that the money in count 11 was stolen from a former school friend, there seemed little reason to distinguish these counts, on the limited materials before this Court. One count of theft of $4,000 (count 45) also attracted a two year sentence, but it was connected to a count (34) of theft of $85,000.

[2] For the like offence, see now s.188 of the later Act.

[3] See also fn.[ above, para.[].

4] On the materials before this Court there is no reason to believe that the sentences were differentiated by reference to the number of thefts "wrapped up" in each count.

[5] Any such charges required the formal, written consent of the Director of Public Prosecutions: see s.42(3) of the Act. In this respect the delay was less than six months.

[6] [1998] 1 V.R. 664, esp. at 680.

[7] For this the appellant relied on Pearce v. The Queen (1998) 194 C.L.R. 610.

[8] The word "deficiency" appeared several times in the Act (as in s.188 and elsewhere in the Legal Practice Act 1996) but was a term which seems otherwise not to be defined. In the Act the expression "defalcation by solicitor" formed the heading to s.42. The word "defalcation" was very widely defined in s.51(1), but that appeared in Part V, not Part IV of the Act. I shall continue to use "defalcation" as a convenient shorthand for the offence described by s.42(1).

[9] That may thought to have been an anachronism, as the maximum term for a similarly, but not identically, expressed offence under s.188 of the 1996 Act is now 15 years.

[10] [1998] 1 V.R. 551.