R v Donald

The Respondent's Offending 7The respondent was sentenced on the basis of an agreed statement of facts. 8The respondent worked as a client adviser for the stockbroking company Bell Potter Securities Ltd from 1 February 2003 to 19 March 2008, when he was suspended by his employer. In May 2003, the respondent opened the GT Henderson account in the name of his father-in-law, Mr Henderson. The respondent's father-in-law had no knowledge of the account when it was opened. Mr Henderson did not give the respondent any instructions in relation to the share trading which took place on the account. 9The respondent represented to his employer that he was trading on this account on instructions from Mr Henderson. The respondent initiated and carried out trading on the GT Henderson account without reference to Mr Henderson. Mr Henderson only became aware of the account and the transactions conducted through that account in about March 2008 when the respondent's employer notified him. 10In about November 2003, Mr French opened two share trading accounts with Bell Potter in the name of his company, French Consulting Pty Limited. The respondent became Mr French's stockbroker. Between 2003 and 2006 Mr French and the respondent regularly discussed share purchases or sales on the accounts. During this period, the respondent acted on Mr French's instructions. 11In about March 2006, one of the two accounts was closed and the shares consolidated in the one account. Mr French and the respondent agreed that the respondent could trade on the French Consulting account on a discretionary basis, that is, without receiving instructions from Mr French. From March 2006, the respondent carried out all trades on the French Consulting account without reference to Mr French. Mr French monitored the overall trading performance on the account but gave no instructions as to which shares would be bought or sold. 12The respondent had less than the minimum 10 years' experience required by his employer in order to undertake discretionary trading. He did not notify his employer that he had discretionary authority to trade on the French Consulting account. The respondent concealed his involvement by indicating that the buy and sell orders had been made by "SF", a reference to Mr French. 13On 27 March 2006, Logetost Pty Limited was incorporated, with Mr Henderson recorded as the sole director, secretary and shareholder. On about 5 April 2006 Logetost opened an account with Bell Potter. Mr Henderson signed the account opening forms with the respondent nominated as the stockbroker for that account. In reality, the respondent controlled the affairs of Logetost and conducted all share trading on the account. Mr Henderson did not give any instructions for any of the trades which were conducted on that account. 14The respondent did not inform his employer that his wife was the beneficial owner of the shares in Logetost and that the account should have been a staff account. All trading on a staff account would have been subject to management approval. 15In general terms, the respondent purchased shares for French Consulting Pty Limited and when the shares appreciated in value, the respondent transferred the ownership of those shares from that account to either the GT Henderson account or the Logetost account. These transactions are referred to as rebookings. Shortly after the transaction, the respondent sold the shares and took the profits. 16The respondent also purchased shares on the GT Henderson or the Logetost accounts and where they depreciated in value, the respondent rebooked the transaction to French Consulting, which then became liable to pay for the shares. The effect of these rebookings was to transfer the losses from the accounts controlled by the respondent, namely GT Henderson or the Logetost account, to French Consulting. 17As the controller of all three accounts, the respondent carried out the initial trading, the rebooking of the transactions between the accounts and ultimately the sale of the shares for his own benefit. 18Between 28 September 2005 and 12 March 2008 the respondent rebooked 29 trades between French Consulting and the two accounts controlled by him, namely the GT Henderson account and the Logetost Pty Ltd account. The respondent also purchased 225,000 shares in ABC Learning Centre Ltd without nominating a client account, thereby causing the shares to be purchased on the Bell Potter Suspense account. The respondent improperly rebooked that transaction from the Bell Potter Suspense account to the French Consulting account on 10 March 2008. 19The financial benefit to the Logetost and GT Henderson accounts from the rebooking of the profitable share trades amounted to approximately $1,032,374.04. The rebooking of the loss-making share trades resulted in a loss of approximately $749,333.67. 20Between 3 April 2006 and 9 October 2007, approximately $670,000.00 was transferred from Logetost to a company of which the respondent and Mr Henderson were the sole directors. Those funds were disbursed by the respondent. 21A Macquarie Cash Management Trust account was linked to the Logetost trading account. Mr Henderson was the sole signatory to the Cash Management account and disbursed the funds from this account as directed by the respondent. The disbursements included $274,000.00 to a trust account in the name of a firm of solicitors acting for the respondent in a property purchase, $418,393.00 to Cape Cod Australia for renovations to the respondent's Clovelly home, $97,713.00 to the respondent, and $286,447.00 for the benefit of the respondent. 22On 17 April 2008 the respondent's employer lodged a breach report with ASIC in relation to the respondent's rebooking of share trades between French Consulting Pty Limited, and the two accounts over which the respondent exercised control, namely GT Henderson and Logetost. The respondent did not declare his interest in the GT Henderson or the Logetost accounts to his employer, contrary to its rules. 23French Consulting Pty Limited was reimbursed through Bell Potter Securities' insurer, QBE, for the losses it incurred as a result of the respondent's conduct. 24QBE later brought civil proceedings against the respondent and four others. Default judgement was obtained against the respondent but was not pursued on the basis that the court was not satisfied that the respondent was aware of the proceedings. 25The sum of $75,000.00 was eventually accepted in settlement of the claim against the remaining four defendants. That sum was paid to QBE as partial recovery of the monies that the respondent misappropriated. That money came from the sale of the respondent's home.

The Grounds of Appeal 26In addition to the ground of manifest inadequacy, the Crown alleges error on the part of the sentencing judge, in that her Honour allowed the factors of delay and mental illness to effectively displace the principle of general deterrence in favour of a penalty other than full-time custody. This alleged error is pressed as one of principle, not one of mere weight as submitted by the respondent. 27The Crown takes issue with the judge's finding that the respondent's mental illness would render a custodial sentence more onerous. Otherwise, the Crown's argument is essentially that the sentencing discretion miscarried.

The Issue of Delay 28A chronology of the investigation and prosecution of the offences was before the sentencing judge. Despite referral of the irregularities to ASIC on 17 April 2008, the investigation was not commenced until 22 August 2008. The matter was referred to the Commonwealth Director of Public Prosecutions in May 2009. Between January 2010 and the end of March 2011, there were a number of exchanges between the DPP and ASIC pursuant to requisitions which were raised by the DPP. 29On 14 April 2011 the respondent left Australia to take up residence in Indonesia with his wife and family. 30The appropriate charges were settled by the DPP in late May 2011 and Court Attendance Notices (CANs) were sent to ASIC for service upon the respondent. It appears that the respondent became aware of the probability of charges in May/June 2011 through a conversation with his father-in-law. In June of 2011, the DPP considered extradition proceedings against the respondent. However, ultimately that course was not pursued. On 1 September 2011 ASIC provided the DPP with a letter from the respondent's counsel, authorising ASIC to serve documents on his clerk. That counsel was later appointed to the Local Court bench, necessitating a change in legal representation. 31The first return date of 13 September 2011 in the Local Court was adjourned because of problems associated with service of the CANs. Between September and December 2011 there were various adjournments sought on behalf of the respondent. In December 2011 the respondent returned to Australia. 32The respondent first appeared in the Local Court on 10 January 2012. Between January and July 2012 several adjournment applications were made by the respondent on the basis that he was pursuing a grant of legal aid, which was initially refused. In July 2012 legal aid was granted. 33On 28 August 2012 the respondent entered a guilty plea to the rolled up count in the Local Court. That was the product of plea negotiations between the DPP and the respondent's legal representatives. 34On 7 September 2012 the matter was listed for sentence in the District Court on 22 November 2012. However, on that date the matter was stood over to the 15 February 2013 on the basis that the respondent required more time to prepare his case. On 2 February the matter was stood over for sentence to 5 April 2013 by consent on the basis that the Crown wished to obtain a psychiatric report in response to the psychiatric report prepared on behalf of the respondent. The sentencing proceedings took place on 5 April 2013. 35In short, there was a period of three years and one month between the breach report and the laying of charges. Thereafter, the lapse of time was principally attributable to the respondent's absence from Australia, the consequent difficulties associated with service of the CANs, delays in the grant of legal aid, a change in the respondent's legal representation, plea negotiations and the preparation of the respondent's case on sentence. 36Despite a submission from the Crown that the length of the investigation was referable "in large measure" to the complexities involved in investigating this type of offence, involving as it did tracing a number of transactions through multiple accounts over a lengthy period of time, her Honour made the following finding on sentence :- I am not persuaded that the complexity of the offending transactions justify a three-year consideration by ASIC and the DPP before a decision was made to charge Mr Donald. The transactions are essentially 30 variations of the same conduct, involving three accounts in 29 transactions and a fourth in the 30th. ASIC is a specialist corporate investigative body and the Commonwealth DPP has experience and expertise in prosecuting corporate offences. Therefore the three-year period from referral to ASIC until the approval of charges involved substantial and largely inexplicable delay. [Her Honour accepted that the respondent could not be criticised for his decision to go overseas, the initial refusal of legal aid and the change in legal representation.] ............................................................................. There was a three-year delay by the Crown between the detection of the offence and Mr Donald being charged. It is now just over five years since the last transaction constituting the offence and the detection of the offence. In that period Mr Donald has demonstrated a commitment to his rehabilitation by attending treatment for his illness and ceasing abusing drugs and alcohol. The delay and Mr Donald's substantial rehabilitation during the time since the offence warrants some amelioration of his sentence. 37The Crown does not now dispute that the delay was relevant in so far as it allowed the respondent to achieve a measure of rehabilitation and treatment during that period. Nonetheless, the Crown contends that the delay did not of itself justify any extension of leniency : R v Wall (2002) 71 NSWLR 692 at [89] : R v Kearns [2003] NSWCCA 367 at [68] - [69] ; R v Scook v R (2008) 185 A Crim R 164 at [31] - [34], [58] - [65]. 38The Crown further submits that her Honour was obliged to have regard to "the well recognised difficulties and complexities involved in investigating and prosecuting white-collar crimes, particularly when there has been conduct designed to make detection of the offence more difficult, as was the case here". The Crown submits that it was somewhat inconsistent for the judge to recognise the Crown's concession that "the trial would have been lengthy and complex" whilst at the same time refusing to acknowledge the complexity of the investigation. The Crown maintains that the three years between the breach report and the laying of charges, although a substantial period of time, "was not disproportionate to the complexity of the matters being investigated". The respondent suffered no detriment; to the contrary he was at liberty to travel overseas. The Crown submits that in all the circumstances, the delay "did not warrant any significant reduction or amelioration of the penalty". 39By way of response, the respondent draws attention to the fact that there were no specific factual matters relied upon in support of the submission that the delay was not disproportionate to the complexity of the investigation. The respondent observes that the Crown does not submit that the judge's finding in relation to the substantial and inexplicable delay was not open to her Honour. Nor did the Crown submit that it was not appropriate for the judge to have regard to the overall delay of five years between the detection of the offence and the sentencing proceedings, given that the respondent's subjective circumstances had changed significantly over that time. 40The respondent relies upon R v Schwabegger [1998] 4 VR 649, R v Fahda [1999] NSWCCA 267, Khoury v R [2011] NSWCCA 118 and Blanco v R (1999) 106 A Crim R 303. 41In Wall, the delay between the commission of the offence and sentence was in the order of six years but was primarily attributable to the late detection of the offence and the offender's plea of not guilty. The comment by Wood CJ at CL at [89] (Meagher JA and Bell J agreeing) that :- delay in the prosecution of white-collar crimes is not unusual and the fact that they are so difficult to discover and successfully prosecute is one of the reasons why general deterrence is so important ought be understood in that context. Where the bulk of the delay occurs between the detection of the offences and charging, these remarks are perhaps less apposite. 42In Kearns, the offender was convicted after trial of nine offences charged under the Corporations Law 1991 (Cth) and the Crimes Act 1900 (NSW). The offender was a participant in a joint venture in a New Zealand financial services group known as the Equitable Group of Companies, of which the parent was Equitable Investments Limited. The offender committed the relevant offences with the intention of taking control of the Equitable Group. The offences consisted of a complex series of share transactions and deceptive conduct on the part of the offender. One can readily understand why the Chief Justice determined at [68] (Dunford and Hidden JJ agreeing) that :- the period of some three and a half years for the process of investigation and determination of which charges could be pursued does not, in the circumstances, appear to me to be so excessive as to constitute a factor that requires to be taken into account in the exercise of the sentencing discretion. (italics not in original) 43The West Australian decision of Scook also falls into the category of a complex and lengthy course of offending conduct, coupled with significant delay occasioned by various interlocutory applications by a co-offender. The offender in Scook :- was the instigator of a scheme and coordinated the buying and selling of millions of shares in Intrepid on the ASX in the period 2 January to 27 February 1998. The charges related to trades on almost every trading day in that period and involved total shares in excess of 11 million. The appellant coordinated the trading by giving buy or sell instructions to different brokers on 13 share trading accounts he was authorised to trade on and by causing a group of six traders to place buy and sell orders with their brokers on their accounts at his direction. (at [6]) 44McClure JA helpfully reviewed the authorities relating to the significance of delay and concluded :- [31] The authorities support the following propositions. Delay itself (mere delay) is not mitigatory. Delay in combination with other relevant sentencing factors favourable to the offender, such as progress towards rehabilitation, is mitigatory. In those circumstances, delay is facilitative or causative but not itself mitigatory. As a consequence, the reason for the delay is not ordinarily relevant. It may be so if the delay was attributable to the offender (see Shore (1992) 66 A Crim R 37). [32] It is not possible to identify all factors which in combination with delay will be mitigatory. It will depend on the circumstances. For example, in Schwabegger and Duncan, the delay contributed to a legitimate expectation that there would be no prosecution on which the offenders acted. [33] It is the case that in the period prior to conviction and sentence, an accused is left in a 'state of uncertain suspense' which for many offenders (certainly those with prior good character) would be significantly stressful. However, that is a consequence of involvement in the criminal justice system and is not ordinarily mitigatory. An accused is entitled to avail himself or herself of all the rights and protection offered by the criminal law with the inevitable consequence of delay before conviction and sentence, but such delay is not mitigatory (unless it facilitates or results in other positive sentencing considerations). However, undue or unreasonable delay not attributable to the conduct of the accused may itself be mitigatory because it unreasonably extends the period of suspense. [34] I would not draw an inference that the delay between the commission of the offences (or from the time of the ASX referral to ASIC) and the appellant being charged in December 2002 is unreasonable having regard to the nature and extent of the appellant's offending (which involved the use of a number of innocent agents and active concealment of his role), its factual complexity and the need to obtain evidence on each count. The delay between the appellant being charged and sentence is attributable in large measure to Mr Braysich's interlocutory applications. In my view, the proper use of interlocutory applications by a co-offender properly joined does not render the consequential delay unreasonable. 45Buss JA, in the same case, agreed with these comments and made some additional observations, including that :- [59] Secondly, delay will not ordinarily be a mitigating factor if it has been caused by difficulties in detecting, investigating or proving the offences committed by the offender, and the period of the delay is reasonable in the circumstances. [60] Thirdly, delay will not ordinarily be a mitigating factor if it is caused by the offender's obstruction or lack of co-operation with the State, prosecuting authorities or investigatory bodies, but the offender's reliance on his or her legal rights is not obstruction or lack of co-operation for this purpose. [61] Fourthly, delay will not ordinarily be a mitigating factor if it results from the normal operation of the criminal justice system, including delay as a result of the offender or a co-offender exercising his or her rights; for example, interlocutory appeals and other interlocutory processes. [62] Fifthly, delay may be conducive to the emergence of mitigating factors; for example, if, during the period of delay, the offender has made progress towards rehabilitation or other circumstances favourable to him or her have emerged. [63] Sixthly, delay (not being delay of the kind described in the second, third and fourth guiding principles) will ordinarily be a mitigating factor if: (a) the delay has resulted in significant stress for the offender or left him or her, to a significant degree, in 'uncertain suspense'; or (b) during the period of delay the offender has adopted a reasonable expectation that he or she would not be charged, or a pending prosecution would not proceed, and the offender has ordered his or her affairs on the faith of that expectation. [64] Seventhly, delay caused by dilatory or neglectful conduct by the State, prosecuting authorities or investigatory bodies may result in a discount of the sentence that would otherwise be imposed on the offender, if the court thinks it an appropriate means of marking its disapproval of the conduct in question. 46Miller JA in Scook agreed with both McClure JA and Buss JA. 47McClure JA's reference to R v Schwabegger requires some explanation, given the respondent's reliance upon it. The offender was charged with taxation fraud, relating to five income tax returns, six years after the offences were detected and in the meantime, had made full reparation to the Commissioner of Taxation pursuant to an agreement. 48For completeness, although these remarks were made in the context of an offence of aggravated car jacking, Howie J observed (Basten JA and Hall J agreeing) in R v Barker ; R v Gibson [2006] NSWCCA 20 :- 78 The delay in the prosecution of the respondents was not of the quality that could lead to any significant reduction in the ultimate sentence to be imposed. This case was very different from Todd or other cases where significant regard has been given to the effect of delay. This could not be regarded as a stale offence after a period of only two years delay and having regard to its seriousness. In any event, the impact of delay will play a significant role in the determination of the appropriate sentence in those cases where the delay is due to the operation of the judicial system and not to the actions of the offender: R v Kay [2004] NSWCCA 130 at [28]. It has little application where, as here, the respondents either chose to say nothing at arrest or, as in the case of the respondent Barker, denied the offence and gave the police a false account of his movements: R v Hathaway [2005] NSWCCA 368 at [44]. 79 One of the reasons why delay mitigates the offence is because of the uncertainty left in the mind of the offender. The only uncertainty suffered by the respondents was whether the police would be able to make a case against them. That is not relevant uncertainty for the application of the principle: R v Shorten [2005] NSWCCA 106 at [19]. .................................. In the present case the respondents chose to plead not guilty, as was their right, until after the trial date was fixed. But they can hardly complain of the delay up to committal and from committal to trial when they could have pleaded guilty at any time: R v Bragias (1997) 92 A Crim R 330. Nor was the delay before charging shown to be unreasonably lengthy. 80 This does not mean that the delay was totally irrelevant. Her Honour was required to take into account the rehabilitation, if any, that had occurred during the delay. Generally where rehabilitation is shown during the delay, mitigation arises because of the rehabilitation achieved rather than because there was delay: R v Carter [1999] NSWCCA 376 at [25]. 49There is nothing in this Court's consideration of the issue of delay in Fahda, Khoury, Blanco, Barker & Gibson, TJ v R [2009] NSWCCA 99, Tourni v R [2010] NSWCCA 317 or Giourtalis v R [2013] NSWCCA 216 that departs from the summary set out above in Scook, with the exception of the last factor (a mitigated penalty as a mark of disapproval of tardy prosecutorial conduct) in Buss JA's judgment. I am not aware of any authority in this State that has endorsed such an approach to the sentencing of an offender, where the absence of a satisfactory explanation for the delay leads to the conclusion that the prosecution has been "dilatory or neglectful". Overwhelmingly, the focus is on the consequences of the delay to the offender, no matter what the explanation for it. 50There is some force in the Crown's submission that the judge placed particular emphasis on the fact of delay, independently of the significance that attached to the delay by reason of the respondent's steps towards rehabilitation. That conclusion arises from the judge's reference to "the delay and [the respondent's] substantial rehabilitation". 51However, there is also some tension between the Crown's submission at [38] above and its failure to directly challenge the judge's finding of "largely inexplicable delay". It is not altogether clear in what way the investigation was complex. The Crown's investigative and prosecuting agencies were not confronted with complex arrangements made by the respondent in order to disguise the fraudulent nature of his activities. He disguised his offending with respect to the French Consulting account by falsely claiming that trades were made by Mr French himself. The Logetost and GT Henderson accounts were operated by the respondent in the name of his father-in-law. Neither of these subterfuges was particularly sophisticated. His offending was, apparently, readily detected by his employer, although it persisted for two and a half years before his employer's suspicions were enlivened. The three accounts operated by the respondent and the 30 transactions are a far cry from the magnitude of the trading in Scook. 52There was a delay of four months between referral of the matters to ASIC and the commencement of the investigation. There was a further nine months between the commencement of the investigation and the referral of the matters to the DPP. There followed two years of requisitions on the part of the DPP before the charges were framed. It is not suggested that the respondent did anything, beyond an insistence on his legal rights to representation and defence of the charges, that contributed unreasonably to the lapse of time between the settlement of the charges and sentencing. It is true that he was free to travel overseas, although the DPP appears to have been content to allow that to occur. All in all, the proceedings from the outset were conducted at a leisurely pace. 53In these circumstances, the remarks of Vincent AJA in Schwabegger are pertinent :- There is a serious incongruity between the assertion that an offence is serious and that the courts must, through the sentences they impose, endeavour to limit its incidence, on the one hand, and such a leisurely progression of the criminal justice proceedings which follow its commission that literally years pass before the matter comes before the court, on the other. For a number of reasons, the investigation and prosecution of criminal conduct should be conducted as quickly as is reasonably practicable if the objectives of the system are to be attained. Additionally, a legitimate sense of unfairness can develop when the criminal justice process proceeds in what can be perceived as too leisurely a fashion. 54That is not to say that anything other than the consequences of delay is the operative concern in the sentencing exercise. It simply acknowledges that where, as here, general deterrence plays a significant role in the sentencing of an offender, that sentencing principle is undermined, not just by an inadequate sentence but also by a failure on the part of the prosecution to progress the matter expeditiously. 55I am not persuaded that, in the circumstances of this case, there was any error in failing to advert to the difficulties and complexities involved in investigating and prosecuting "white collar crimes". Difficulties and complexities may arise as a general proposition, but every case must be considered on its own facts. That is essentially what her Honour did. 56It was not suggested by the respondent that there was any legitimate expectation on his part that he would not be charged. It is reasonable to conclude that he was, however, in a state of suspense as to his ultimate fate from the time that his offending was detected. For the reasons that I have given, it was open to the judge to mitigate the penalty to some extent on the basis that the delay between the breach report to ASIC and the settlement of the charges was unreasonable in the circumstances, and that the respondent's state of suspense was therefore unreasonably extended. 57The Crown's submission, that the delay in all the circumstances did not warrant a significant amelioration of the penalty (represented by the suspension of an otherwise appropriate sentence), cannot be answered without a consideration of the respondent's mental illness, its contribution or otherwise to the commission of the offence, and the treatment that the respondent has undergone for that mental illness since its diagnosis and the detection of the offending. The real significance of the delay in this case resides in the respondent's progress towards rehabilitation, which was connected to some degree with his acceptance of his mental illness and its treatment.

The Respondent's Mental Illness 58The evidence before the judge included a report from Dr Canaris, forensic psychiatrist. The report of Dr Canaris dated 11 February 2013 recounted the respondent's personal history, including the respondent's escalating use of alcohol and cocaine dating from his retirement from first grade rugby union in 2003, which coincided with the respondent's employment with Bell Potter. The respondent referred to a separation from his wife in January 2007. In April 2007, his wife persuaded the respondent to seek treatment for a possible psychiatric illness. In June 2007, the respondent was prescribed anti-depressant medication and noticed an improvement in his mood, but ceased that medication after three months. The respondent reunited with his wife in August 2007. In October 2007, the respondent began taking a mood stabiliser. 59The respondent was diagnosed in late 2007 at the age of 33 with a bipolar affective disorder. One of the respondent's treating doctors was of the opinion that the respondent had the disorder in August 2007. The respondent was referred to various treatment options, including the Black Dog Institute where he attended in November 2007. The diagnosis was confirmed in December 2007. Relevantly, the duration of the respondent's bi-polar episodes was about one week, according to the mood assessment completed by the respondent on 6 November 2007, which included a manic phase of one to three days. 60The respondent was placed on antidepressants and a mood stabiliser during this period of time. In the course of consultations between mid to late 2007, the respondent failed to tell any of his treating practitioners that he had been committing the relevant offences. The respondent's offending continued until March 2008, only ceasing when his offences were detected by his employer. 61In January 2008 there was a period of hospitalisation at Northside Clinic. In March 2008 the respondent overdosed on drugs and alcohol and was hospitalised. The respondent was prescribed another anti-depressant in April 2008, which he found beneficial but again ceased taking that medication after four months. He came under the care of Dr Whitten, consultant psychiatrist, in October 2008. Dr Whitten prescribed an anti-depressant and mood stabilisers. However, the respondent was still using drugs and abusing alcohol during this period of time. 62The respondent continued to see Dr Whitten until October 2009. The respondent maintained that he did not fully accept the diagnosis of bipolar disorder and did not fully comply with his treatment regime until 2009. The respondent ceased taking illicit drugs in 2009. In the five months preceding the respondent's consultation with Dr Canaris in February 2013 he had abstained from alcohol. The respondent was regularly consulting a clinical psychologist at the time of sentence. 63In summary, Dr Canaris stated that the respondent gave a history strongly consistent with a diagnosis of bipolar disorder which was currently in remission. That diagnosis took account of the respondent's :- .. frequent episodes of mood elevation with racing thoughts, disorganised behaviour, heightened energy, irritability, greatly decreased need for sleep, hyper sexuality, and impulsivity with no thought for the consequences of his actions, interspersed with periods of severe depression and suicidal ideation, some self-neglect, and markedly impaired day-to-day functioning. 64Dr Canaris noted that the symptoms of bipolar disorder are difficult to treat, partly because they do not respond to standard mood stabilising regimes and partly because patients tend not to comply with treatment. In the respondent's case, his co-morbid alcohol and poly substance abuse made the management of his condition more challenging. Dr Canaris noted a substantial consistency between the respondent's history, observations by other clinicians and the respondent's wife's account. 65Dr Canaris expressed the view that the respondent's bipolar disorder would have contributed substantially to his offending behaviour, in the sense that the respondent's life was personally chaotic and he was guided more by impulsivity than by any attempt to weigh up the consequences of his actions. The respondent was described as a highly intelligent man who was able to maintain a facade of good functioning. 66The Crown did not dispute that the respondent suffered from bipolar disorder at the relevant time and that the illness played a role in the commission of the offences. The difference of opinion between Dr Canaris and Dr Westmore, whose report was tendered on the Crown's behalf, was the degree to which the mental illness contributed to the offending. The Crown disputed that it had a substantially mitigating effect, given that the offending was ongoing, systematic and non-impulsive. 67The essence of Dr Westmore's opinion consisted of the following :- It is probable in my view that Mr Donald's criminal conduct was multi-determined in its aetiology. I am not able, based on his history alone, to find a direct link between his bipolar illness and the offending behaviour and because of that, neither I nor other psychiatrists have suggested that he might have a mental illness defence to the matters now before the court. I would however accept that individuals when experiencing periods of mood elevation and possibly in conjunction with alcohol and substance abuse (cocaine in particular) can suffer periods of impulsivity and impaired judgment. I would accept that if there were periods when he was elevated in mood and abusing substances, then his mood disturbance and substance abuse played some role in the offending behaviour. I cannot indicate that all episodes of offending occurred during such periods however. I was not able to do a detailed analysis, looking at his mood state and his drug and alcohol abuse patterns during the 29 specific transactions he said occurred between 2005 and 2008, which are now the subject of the court proceedings. In summary therefore and, based on the history I have, I would accept that there were probably periods when the offending behaviour occurred when he was adversely affected by periods of either depression, mood elevation and/or drug and alcohol abuse. I cannot say that all the offending behaviour occurred when he was suffering those various psychiatric problems, but I would accept that some mitigating factors might be considered by the court in relation to a probable link at times between his psychiatric problems and some of the offending behaviour. 68This evidence was supplemented by evidence given by the respondent on sentence. The respondent acknowledged that he had engaged in long-term, deliberately dishonest conduct, both with respect to his employer, his client (Mr French) and his father-in-law. The respondent's decision not to disclose his connection with the Logetost account to his employer was a strategic one ; there was no prohibition on an employee having a trading account, but trades were scrutinised by the company. The respondent also agreed that the discovery of the trading irregularities by his employer was responsible for terminating his offending. 69The respondent acknowledged that he had told Dr Westmore that he was aware that others who suffered from bipolar disorder did not necessarily behave dishonestly or commit offences. When asked whether he could attribute his dishonesty to the bipolar disorder, the respondent replied :- Part of the problems that I continue to have is that I am aware that there are people with bipolar disorder that don't commit crimes. I often question and hate myself for what happened in the past and I'm trying to understand why I acted that way, like you know I wouldn't act that way now, but I did act that way then and it is not a simple thing to just say yes, I have bipolar because it is a hard thing to swallow for me . 70The respondent further agreed that he continued to commit offences after he had consulted doctors in relation to his bipolar disorder and after he had been taking medication for that illness. The respondent's explanation, so far as it went, for his dishonesty was that it was a combination of factors, including retiring from rugby union, being exposed to a chaotic environment and taking advantage of the opportunity. The respondent accepted that $400,000.00 of the proceeds of the offending was used in the renovation of the respondent's home and that many other hundreds of thousands of dollars were spent by the respondent for his own benefit. 71All of this material was reviewed by the judge in the course of the remarks on sentence. The most salient findings made by the judge with respect to the respondent's mental illness are as follows :- In my view to dismiss behaviour as not impulsive because it was repeated 30 times over about two and a half years does not acknowledge the nature of the transactions or the nature of the illness Mr Donald suffered from. The transactions are essentially repetition of the same conduct. Repeating conduct does not preclude the behaviour being impulsive when it occurs. ............................................................................ Although there are medical opinions that Mr Donald cycled rapidly between elevated and depressed moods there is no support in any of the material for a suggestion that he moved between elevated mood and clear thinking unaffected by his illness during the period he was offending. Although his symptoms may have fluctuated in their intensity, it is an unrealistic view of the illness that it and its effects were not present during the period of Mr Donald's offending. ................................................................................... Dr Westmore's statements about the effects of bipolar disorder support Dr Canaris' specific opinions about Mr Donald's illness and offending conduct such that I have no difficulty being persuaded on the balance of probabilities that Mr Donald's bipolar disorder and the impairing of his judgment and thinking processes by his illness and his misuse of drugs and alcohol contributed substantially to his offending behaviour. Moreover I note that Mr Donald had no prior criminal conduct or dishonesty, including in the two and a half year period he worked at Bell Potter from February 2003 until September 2005 when his offending began. Therefore it cannot be said that he simply took advantage of the opportunity his work environment presented to behave dishonestly. Clearly his illness was a factor, and I am persuaded a substantial factor, in the commission of his offence. Therefore while Mr Donald's offence, in the absence of his bipolar disorder, would have been assessed as of moderately high seriousness, having regard to the number of transactions and the period of time over which it occurred, the amount of money involved, and breaches of trust, Mr Donald's illness significantly reduces his moral culpability. 72There are a number of qualifications to the judge's findings. Firstly, whilst it might be true as a general proposition that the repetition of conduct does not necessarily disqualify it as impulsive, it is the nature of the conduct which constituted the offending that strongly suggests it could not have been impulsive on each and every occasion. The offending required the respondent to conceal his involvement in the purchase of shares, to take account of any profits and losses relating to the purchase of the shares, and to re-book the shares into other accounts with the intention to avoid losses and maximise profits accruing to accounts from which he withdrew the funds. The rational, systematic and covert nature of these transactions does not sit comfortably with the concept of impulsivity. 73Secondly, the material from the Black Dog Institute provided a basis for concluding that the depressive and manic episodes suffered by the respondent were cyclical and that the duration was about a week at a time. It was never suggested that these episodes were continuous and pervasive. Nor was it suggested that the disorder prevented or inhibited the respondent from appreciating the gravity of his actions. 74Thirdly, the re-booking transactions undertaken between 10 and 12 March 2008 (which in combination netted the respondent approximately $280,000.00) and the respondent's failure to disclose his offending to his treating doctors, despite his awareness of the nature of his illness at the time and his medication for that illness, are inconsistent with the conclusion that all of the respondent's offending was relevantly causally connected to the bipolar disorder. 75A convenient summary of the principles relating to the sentencing of offenders with a mental illness appears in R v Z [2006] NSWCCA 342, per Beazley JA (Howie J agreeing) at [48] to [57]. They are uncontroversial. Mental illness may be relevant to the emphasis to be given to specific and general deterrence, it may affect the offender's ability to understand the wrongfulness of his/her actions or to make reasonable judgments, or to control his/her faculties and emotions, thereby reflecting on the offender's culpability. Depending on the nature and severity of the mental illness, it may render a custodial penalty more onerous than otherwise. Mental illness is but one of the factors that forms part of the complex interplay of factors relevant to the sentencing process : R v Harb [2001] NSWCCA 249. 76I have no difficulty accepting that the respondent's bipolar disorder compromised his ability on occasions to control his faculties and emotions, but I do not accept, given the nature of his offending, that he was unable to understand the wrongfulness of his actions, or to make reasonable judgments. In those circumstances, the respondent's moral culpability for his offending was, in my view, moderately reduced. There was still a significant role for general deterrence to play, particularly where serious breaches of trust and dishonest trading in the market were concerned : Hartman v R [2011] NSWCCA 261 at [79], [91] and [92] ; R v Pantano (1990) 49 A Crim R 328 at 330. 77I also accept the Crown's submission that there was no evidentiary basis for the finding that the respondent's time in custody would weigh more heavily upon him than other offenders. The evidence established that the bipolar disorder was in remission and that the respondent was adequately medicated. There was no basis to assume that the respondent would not receive appropriate treatment in custody. 78I am of the view that the sentencing judge's discretion with respect to the issue of mental illness miscarried.

Manifest Inadequacy 79The judge was obliged to impose a sentence pursuant to s 16A(1) of the Crimes Act 1914 (Cth) that was of a severity appropriate to the circumstances of the offence. The circumstances included the fact that the offence formed part of a course of conduct consisting of a series of criminal acts of the same or similar character, the loss resulting from the offence, the need to ensure that the respondent was adequately punished, and the respondent's character, antecedents, age, means and physical or mental condition. 80The judge acknowledged the number of transactions, the period of time over which they occurred, the amount of money involved and the breaches of trust inherent in the offence before determining that, but for the respondent's bipolar disorder, the offence was of a "moderately high seriousness". This assessment was open to the judge in the exercise of her Honour's discretion. The suspension of the term of imprisonment was directly linked to "the significance of Mr Donald's bipolar disorder to his offence and the significant delay between the offence and the prosecution and ... sentencing ... , during which time he has taken significant steps to rehabilitate himself." 81It is not apparent that her Honour took account of the delay other than on the basis that it had afforded the respondent the opportunity to achieve significant rehabilitation. There is no doubt that the respondent has demonstrated real remorse and contrition, and that his rehabilitation is largely complete, provided he continues treatment for his bipolar disorder. It is accepted that the delay was relevant on that basis. 82Without wishing to re-visit the debate concerning factors relevant to the assessment of the objective gravity of the offence, as opposed to factors relevant to moral culpability, her Honour's assessment of the gravity of this offence as moderately high was correct, notwithstanding the respondent's bipolar disorder. The respondent's mental illness was capable of reducing his moral culpability, but it had little or no bearing on the assessment of objective gravity : Muldrock v The Queen [2011] HCA 39 at [19] and [54]. It was, of course, relevant to the sentence to be imposed, but the starting point was recognising that the respondent's offending disclosed significant criminality. 83Having regard to what I have determined is a qualified link between the respondent's mental illness and the offending, her Honour's decision to suspend the sentence is called into question. The respondent himself recognises that the sentence is lenient, but maintains that it is not manifestly so. I disagree. 84There are two factors in particular that demonstrate that the sentence failed to reflect the gravity of the offence and failed in particular to serve as an effective deterrent to other similarly intelligent, competitive professionals in the financial markets. One is the representative nature of the charge and the other is the inherent leniency in a suspended sentence. 85Most recently, in R v Glynatsis [2013] NSWCCA 131, this Court, in allowing a Crown appeal in respect of a non custodial sentence imposed upon an offender convicted of insider trading, noted with apparent approval what Garling J said in R v Richard [2011] NSWSC 866. Garling J observed that there was a considerable advantage to an offender in a "rolled up" charge, in that it restricts the maximum penalty to that for one offence, instead of what is in reality a number of discrete offences. The advantage to this respondent was secured by the charge bargaining that contributed to some extent to the delay in the proceedings. 86It has also been repeatedly observed that the real bite of general deterrence takes hold only when a custodial sentence is imposed : R v Boulden [2006] NSWSC 1274 per Whealy J at [51] ; R v Zamagias [2002] NSWCCA 17, per Howie J at [32]. Notwithstanding judicial statements to the effect that a suspended sentence is a sentence of imprisonment, the community (including those in "white collar" occupations) might be justifiably forgiven for thinking that an offender who is serving a bond in the community has escaped meaningful punishment.

Residual Discretion 87Accordingly, the intervention of this Court is warranted, subject to a consideration of the residual discretion. That discretion takes account of the primary purpose of Crown appeals, namely to lay down principles for the governance and guidance of courts having the duty of sentencing convicted persons : Green v The Queen; Quinn v The Queen [2011] HCA 49; 244 CLR 462 at 465-466 [1]-[2]. 88Evidence of the respondent's progress since the imposition of sentence and the hearing of the appeal was received on the usual basis. That material discloses that the respondent has continued to live in Bali with his family, where his wife operates an on-line clothing business which appears to enjoy moderate success. The respondent has adopted a regime of rising early and exercising, then assisting with the needs of the children. He is not in any form of employment (other than assisting his wife in her business) and is continuing with treatment for his bipolar disorder. It is understandable that the institution of the Crown appeal has given rise to episodes of depression and anxiety in the respondent, which have in turn impacted on his family. 89Taking account of these considerations, I would nonetheless allow the Crown appeal and quash the sentence imposed on 26 April 2013. In lieu, I would substitute a sentence of two years' imprisonment to date from 25 October 2013 and order the respondent's release to a recognisance release order from 25 October 2014, expiring 24 October 2015. 90ADAMSON J : I agree with Latham J. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 October 2013