R v Duncan

District Court of NSW|2019-11-01

Introduction

Nigel Duncan was born in 1954. He received an excellent education and support from his family. He worked, studied and in 1988 was admitted as a solicitor in the Supreme Court of New South Wales. He practiced as a solicitor, primarily in Wollongong and Shellharbour, until he returned his practicing certificate in November 2017.
He returned his practicing certificate in 2017 because it was discovered that he had been systematically defrauding clients of the firm who then employed him. He now stands for sentence today for two very serious offences of dishonestly obtain financial advantage by deception: s 192E 1(b) Crimes Act 1900. He has adhered to his pleas of guilty today.
Those offences each carry a maximum penalty of ten years imprisonment. As a consequence of his crimes Duncan must today be imprisoned. He will lose not just his liberty but his reputation and most of the things which he valued in his life prior to the commencement of his criminal activity.
Duncan accepted responsibility for his crimes when the matter was before the Local Court. Reparation has been made in full and he has expressed appropriate remorse and contrition both in evidence and practically. He will have the full benefit of the utilitarian and other values of his pleas of guilty and his reparation.

Serious fraud offences

Maximum Penalties

The offences each carry a maximum penalty of ten years imprisonment. Courts must always pay careful attention to maximum penalties. They are one sentencing measure that must be balanced with all other relevant factors. They also invited a comparison between this case and other cases. The courts do not simply go to the maximum penalty and then proceed by way of making proportional deductions from it.

Offences by Solicitors

In the course of the hearing today my attention was drawn to a point of fundamental importance set out by the New South Wales Court of Criminal Appeal in R v Hawkins (1989) 45 A Crim R 430: In matters involving frauds by a solicitor that it must be made clear to the public that the legal profession will not be protected in the courts against fraud of any kind.
The courts recognise that solicitors are placed in a position of trust by the law and the community. The position is a high and prestigious one. The profession of solicitor can provide high financial rewards. Processes established by the profession, the courts and parliament seek to ensure that only persons of the highest integrity are permitted to practice as solicitors.
Members of the community put their trust in the honesty of solicitors. When that trust is abused by the commission of fraud, in any form, not only does the client or person defrauded suffer but the integrity of the profession is necessarily called into question. Accordingly, the courts must impose sentences that are calculated to ensure that no solicitor will be left in doubt as to the serious consequences that will follow from such conduct.

Objective seriousness of offending

The offending here involved a number of acts over a period of years - 2011 to mid‑2017. Many individual clients of his employer were affected. Count 2 enables recognition of the actions giving effect to the fraudulent purpose in Count 1. They involved multiple acts of dishonesty using his clients' money to conceal his fraud as the agreed facts set out; robbing Peter to pay Paul. The amount of money involved was significant; close to $800,000. It was all expropriated ultimately to the offender's advantage and involved close to $1.4 million being transacted.
Each of the transactions resulted from, and formed part of, a course of deceitful conduct that might not have been discovered absent the initial complaint and the subsequent audit. The offences individually and collectively were undertaken by the offender using his position in the community as a solicitor and his prior good standing in the community. It was a profession he served, it appears faithfully, until he broke trust with it in 2011. Duncan acted in breach of his duty to his employer's clients and a breach of duty and trust shown in him by his employer. As a senior solicitor it would be expected that he would not be supervised to the extent one might expect for a junior employee.
The offences ultimately became systematic and planned, obviously premeditated and of some sophistication. Duncan's plan relied on his firm treating and trusting him as a senior and very experienced professional. They were entitled to do so. That finding means that I do not accept the criticisms implicit in his counsel's submissions about negligence by the firm.

Reparation

Duncan did not admit the offences initially, despite his firm directing him to an ethics course refresher. I am aware, because I participate in such activities, that annually solicitors are required to engage in practical training, which includes ethical training. Nothing said in any of those mandatory professional development courses caused Duncan to pause in his criminal activity.
There was some delay before ultimately he gave his cooperation or lack of any opposition to the recovery process. Even though the results were inevitable the reimbursement and reparation in this matter was done with some expedition. It is important to note that the Supreme Court proceedings took a matter of days. Supreme Court proceedings may often take many months or years.

Need for deterrent sentences

The principles derived from Hawkins have been repeated many times by judges at first instance and by Courts of Criminal Appeal: see for example R v Jafari [2017] NSWCCA 152. It is almost uniformly a feature of such offending that the offenders are likely to have no prior convictions, to have good character references and to have good prospects of rehabilitation. Those matters gave rise to the very position of trust which the offender was able to abuse. That position of trust means that such offences are hard to detect.
Sentencing courts must take into account the broader consequences for the legal profession, and our legal system as a whole, that result from the disclosure when one of its members has taken a significant sum of money from accounts which he was expected to administer and utilise in his clients' interest. There is a public interest in an honest and accountable legal profession.
In Jafari, Basten J noted: "A statistical analysis may suggest that the severity of the language used by justices in such cases is rarely matched by the sentence imposed". With respect, I cannot agree with this sentiment, which I do not interpret as a binding principle. Severity of both language and sentence is required but often the real impact of a sentence of imprisonment on any type of offender can be underestimated. Likewise, the deterrent effect of heavy and harsh sentences can be overestimated.
Given the number of solicitors who practice and the number of trust accounts administered, crimes such as Duncan's are, very, very rare. In extremely large proportions solicitors do not breach their ethical and financial obligations. In some other types of fraud, or commercial drug supply or importation matters, offenders often make a very blatant calculation of risk as against profit. In such cases heavy deterrent penalties may possibly have a significant effect. However, as the evidence in this case makes clear, offenders such as Duncan rarely think about, let alone calculate the consequences of their actions. Solicitors have instilled in them fundamental ethical obligations; that process starts on day one at law school. It is continued throughout their professional career by professional development programs. It is reinforced by mandatory practical legal training. They do not need the deterrent effect of heavy sentences to make them do their professional duty.
Here Duncan did not calculate; "If I steal - I will go to gaol - but I'll take that risk." Solicitors know the consequences of stealing from their clients. If caught they will lose the product of years of study, years of work and reputation, and they also know, from the cases to which I have been referred, that if they conduct themselves as Duncan did they will lose their liberty.
Sentences, must by appropriate judicial language and the imposition of custodial sentences, reinforce that message; they are rarely required, thankfully. They are not the only way the Court enforce proper standards in the legal profession. If the penalties imposed on others did not deter Duncan, and cause him to stop and think, harsh punishment for its own sake will not achieve more. Hawkins is perhaps an example of the point. That said deterrence always remains potentially relevant in any sentencing exercise; perhaps with the exception of the young and immature. It is a very relevant factor here. It compels a fulltime custodial sentence of some length to ensure that the community understand how seriously the Courts and the profession view such breaches of the law.
I asked Duncan when he gave evidence today; "why?" It is clear from his answers that he did not calculate; he did not think through or think about the consequences or ask himself "is it all worth the risk." He told me he acted to protect his family. As this case makes clear, in doing so he failed to analyse the proper motivation for his actions. In doing so he lost everything, including his family.
Any solicitor who did what he did would expect not just the potential loss of liberty but the costs to one's personal and professional self‑esteem experienced here. Any sensible calculation, any sensible questioning of whether to engage in criminal activity must be answered invariably by the answer, "no, it would be catastrophic to risk, for short term reward, engaging in such behaviour." This point was made by one of his friends, Mr Mutton, who has stood by him, in a reference that I received today.

Two "rolled up" counts for sentence

There are two counts before the Court. They cover all of the offending behaviour. Each single count includes multiple acts committed for a common purpose, each of which may amount to an offence, and each of which may involve a number of victims. Such a single charge can recognise the course of conduct and has a unifying purpose. It enables the sentencing court to take into account all the details of the offender's conduct and formulate a just and appropriate sentence.
Here, the transactions are connected but within each charge and between the charges. They can fairly be regarded as forming a part of the same transaction or criminal enterprise. I am still required to find and take into account all the details of the offender's conduct which is set out in the agreed facts and the schedules to them. This does not mean that the fact that a large sum defrauded that has been reached by accumulating the amounts from different occasions from different persons is not a matter that is taken into account, far from it. Such circumstances can lead to a more significant penalty than a single offence against one victim. Given the number of victims here this is inevitable.
It is necessary too, that the deterrent and punitive effects of the sentence be reflected in both the head sentence and in any provision for earlier release from custody. The period the offender must actually serve in custody is a matter of importance as it must appropriately reflect the level of criminality of his behaviour.
While there is no general rule that determines whether sentences ought to be imposed concurrently or consecutively, here the sentence for each offence can comprehend and reflect the criminality of the other. Each informs the criminality of the other. The various purposes of sentencing apply equally to both offences. They form a part of an interrelated episode of criminality with many common factors. The first reflects the amount expropriated, the second the sum of the transactions made in order to gain that financial benefit.

Other cases

I have been referred to a number of cases which are set out in the table provided by Mr Macedone, solicitor, who appears for the offender and to other cases to which I will refer in the course of this judgment.
The consistent application of legal principle is always important in a sentencing exercise. The guidance offered by appellate courts is always welcome. A pattern of past sentences for an offence can serve to help establish a range or provide guides to the exercise of a sentencing discretion. However, as the High Court made clear in Hili v The Queen (2010) 242 CLR 520 each case and each offender is different. Sentencing is a discretionary judgment. The mix of factors must be weighed in determining the appropriate sentence will never be precisely the same as in the past or past cases; The Queen v Pham [2015] HCA 39,: (2015) 256 CLR 550.

Evidence for the offender

The guilty pleas must be taken into account. So too must the subjective case of the offender. Mr Duncan gave evidence today. In giving evidence he adopted the history given to his psychologist, Mr Borenstein and the history taken as instructions from his solicitor, Mr Macedone, incorporated into MFI 2.
It is clear from the history that although reasonably successful professionally at various times in his career there were downturns and debts were accumulated. A significant debt to the Australian Tax Office followed the dissolution of an earlier partnership. There were pressures to fund his mother's care. There were the ordinary pressures faced by many families dealing with a mortgage, an overdraft, leasing and other financial requirements. His income was a good one but not one that would be regarded as putting him into the higher reaches of professional income.
There is nothing before me to indicate that he had, at the relevant time, any significant psychological conditions. I am prepared to accept he was worried and concerned about his financial situation, even anxious about it. But nothing in the reports or material before me, or his own evidence explained why he commenced to do what he did and having commenced to do it continued to such a degree. Yes, he was in debt but to risk everything; to defraud his clients, to breach the trust shown in him by his profession, his employers and his friends and family? It beggars belief why he did what he did.
Mr Borenstein, in his careful report, notes the consequences in terms of anxiety and depression; social withdrawal and isolation and suicidal ideation. An example of which was referred to in evidence. Duncan would not be human if he did not feel anxious, depressed and concerned about what he had done and its consequences and the prospect of gaol. No one should underestimate the lived experience of gaol.
Mr Borenstein notes the consequence of the immediate and rapid change in Duncan's personal situation following the revelations of his crime. His wife has left him; his children no longer have contact with him. He has some support today from family members who have travelled from Tasmania to be here. After his disclosure of his crimes, his arrest and his disgrace a close friend offered him accommodation and employment in Western New South Wales. He has been working as a truck driver on modest wages since that date. He has no remaining assets other than the product of those wages.
A number of close friends who have known him most of his life provided references to the Court, together with some who know him from the Dubbo area. They all, while they continue to support him, express their complete shock, perplexity and surprise at his offending behaviour. They all knew him a solid hardworking man who had been a loyal and supportive friend.
The fact that there are pro-social members of the community who still stand by Duncan gives me some hope that when he has served his sentence he can resume, with assistance, normal community life. That life will never be as a member of a respected profession; that is only just and proper. It is expected that the profession will expel him from its ranks.
The Sentencing Assessment Report confirms that Duncan is at low risk of reoffending: exhibit B.
A sentencing court can, when determining an appropriate sentence, properly take into account anything that the offender has suffered such as serious loss or detriment as a result of having committed the offence and I will do so. Some of these concerns were addressed in Einfeld v The Queen [2010] NSWCCA 87; 200 A Crim R 1. There at [85]-[100], Basten J noted that "First, it is clear that no particular diminution in sentence should be accorded for consequences of imprisonment which will, in a general sense, be common to all offenders subject to custodial sentences. Secondly, it is not generally appropriate that those who are wealthier, or who have a higher public profile, should receive lesser sentences because they have more to lose as a result of conviction."
Those principles require this Court, while it can extend appropriate leniency, and as Mr Macedone pleads "mercy", to deal with him equally, as it would any other offender who has offended against others in the community.

Submissions

In his submissions Mr Macedone carefully addresses the offender's family background, which I have only briefly summarised. He set out the concessions made during the interview with the police and the history of the matter as it notes evidence of some health problems which while not inconsequential are generally those felt by most men in their mid‑60s. Duncan had a health scare last year but that has resolved. He will, as any first offender would, find gaol particularly hard. His age and his background will make him an unusual prisoner. He will have trouble adjusting to a custodial environment. All these matters must be taken into account.
There is evidence here that the individual deterrent effect of the sentence will be profound. I am prepared to accept that it is unlikely he will ever offend again or have the opportunity to offend again. Mr Macedone puts forward the payment of reparation, the rectification, as a significant factor. I will give him its full benefit. While he had the benefit of being a person of good character prior to his starting this offending behaviour it is also accepted that that prior good character enabled him to commit this offence. I rejected, as I have indicated, any suggestion that he was not the maker of his own fortune or that he took advantage of lax provisions in the firm who employed him. His actions were his own, they were calculated and they were deceitful and they continued over a period of time.
Mr Coulton, Solicitor Advocate for the Director, appropriately draws my attention to the losses of those he defrauded and that of his employers; the position of trust that was abused; the fact that there were multiple criminal acts and multiple victims. He acknowledges that there are matters in mitigation of sentence. He submits that the real impact of the sentence must be the minimum terms that must be served in custody. While he accepts that there should be, appropriately, some finding of special circumstances this period should not be great. I hope in this judgment I have outlined and considered the various matters that were put before me.

Synthesis

There will be a finding of special circumstances. The plea was entered at the first available opportunity. Duncan was a person with no convictions and prior good character. His prospects of rehabilitation are good, if he is able to maintain his pro-social supports in the community. He will need assistance in adjusting to normal community life on release. He must be released to parole. Every study that I have had access to indicates that parole is not just important to the offender but to the community. The rehabilitation process on parole can counteract to some degree the negative impacts of a custodial sentence on any offender, whether they be a white collar offender or a robber of convenience stores. Those who receive assistance on parole are less likely to reoffend.
Judges must give appropriate weight to a person's character and personal mitigatory factors, but those factors should not overshadow a proper appreciation of the objective seriousness of the crime committed and the harm done, not just too individual victims but to the community and here the legal profession.
Proper recognition of the harm done is an important factor here. Sentences for frauds by solicitors require a deterrent component, sometimes better referred to as retribution; the notion that reflects the community's expectation the offender will suffer punishment and that some offences by some types of offender will merit severe punishment. How then to synthesise all these matters? They can only be resolved by a period of time in custody.

Orders

In relation to both of the matters before the Court you are convicted. Each sentence is to be served concurrently. There will be a finding of special circumstances. The sentences reflect a reduction for the utilitarian value of the pleas of 25%.
In relation to each matter there will be a non‑parole period of two years, which will date from today's date, 1 November 2019. You will be eligible for consideration for release to parole on 31 October 2021. The total of the sentence is three years and nine months. That means the balance of the term of one year and nine months will commence on 1 November 2021 and the total sentence will expire on 31 July 2023.

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: 16 March 2020

At a glance

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Judgment (14 paragraphs)

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Cases Cited (5)

Cited By (3)